Huf company - nri

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 July 2012 Sir,

A Trading company in UAE having a HUF firm as partner OR wholly owned and the karta of the HUF firm living in India who has no involvement in the daily affairs. This company is professionally managed by a NRI Indian.

Can the HUF firm be classified as NRI? and income derived from this company being sent to India be tax free?

Please clarify & oblige.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 July 2012 In case of an HUF, the control and management of affairs, normally vests in the Karta. Since Karta has been resident in India, it implies that control and management of the affairs was not situated wholly outside India. In my view, the Income will attract tax in India. However, tax credit may be taken by the HUF in accordance with the DTAT between UAE and India.
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Querist : Anonymous

Querist : Anonymous (Querist)

13 July 2012 Sir,

Thank you for the quick response, UAE has NIL tax. What Will the DTTA effect be?

Would that mean, the remittance will be taxed in INDIA

Regards

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 July 2012 Then Assessee will get NIL Credit for the Tax.
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However, you may wait for other opinions also.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

13 July 2012 Thank you sir, I will wait for other opinion.

Regards

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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11 December 2012 RBI doesn't allow HUF to open a company outside India in normal cases.

As regards the tax ability the income shall be completely taxable in India if the HUF has partial control and management in India.

Anuj
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