Remuneration to huf karta and members

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2013 can remuneration to HUF katra and members be paid from the business income of HUF (say if HUF is the prop. of a firm)

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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08 August 2013 Yes remuneration can be paid to the members. However, Section 40A(2) will be attracted and AO can disallow excess remuneration.

Prakash Kochar

Prakash Kochar (Expert)
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09 August 2013 REASONABLE REMUNERATION CAN BE PAID TO MEMBERS OF HUF. ASSESSING AUTHORITY MAY EXAMINE THE EXTENT OF WORK DONE FOR BUSINESS OF HUF. IF ITO OBSERVES THAT REMUNERATION PAID IS EXCESSIVE COMPARING SERVICES RENDERED HE MAY REDUCE THE AMOUNT OF REMUNERATION ALLOWABLE.

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