Gift of huf property
anand (Administrative officer) (185 Points)
10 March 2012
Can Karta of HUF gift HUF property to his wife(individual) out of his natural love and affection for her?
Prof. Bajaj
(Author Mentor Motivational Speaker Wealth Planner)
(7375 Points)
Replied 10 March 2012
In my opinion, The HUF as a whole can gift not more than Rs. 50,000 to a member of the HUF.
Also, Husband making a Gift to wife should be avoided as it might attract Clubbing of income.
Anooj
(Chartered Accountant)
(2130 Points)
Replied 10 March 2012
| Originally posted by : Prof. Bajaj | ||
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In my opinion, The HUF as a whole can gift not more than Rs. 50,000 to a member of the HUF. Also, Husband making a Gift to wife should be avoided as it might attract Clubbing of income. |
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CA SACHIN VIJ
(Chartered Accountant)
(112 Points)
Replied 14 March 2012
Gift from HUF is exempt u/s 10 (2) of IT Act.
10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included
(1) agricultural income ;
(2) subject to the provisions of sub-section (2) of any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family.
Further Sec 56 (2) would not be applicable since in decided case law of
HUF is a “relative” for gifts exemption u/s 56(2)(v), (vi) & (vii)
The assessee received a gift of Rs.60 lakhs from his HUF. The AO & CIT(A) held that as HUF was not covered by the definition of “relative”, the gift was chargeable to tax u/s 56(2)(v). The alternate submission that gift was exempt u/s 10(2)was rejected on the basis that s. 10(2) applied only to amounts received “out of income of the estate” on partial or total partition of the HUF. On appeal by the assessee, HELD allowing the appeal:
(i) S. 56(2)(v) exempts gifts from a “relative”. Though the definition of the term “relative” does not specifically include a Hindu Undivided Family, a ‘HUF” constitutes all persons lineally descended from a common ancestor and includes their mothers, wives or widows and unmarried daughters. As all these persons fall in the definition of “relative”, an HUF is ‘a group of relatives’. As a gift from a “relative” is exempt, a gift from a ‘group of relatives’ is also exempt since the singular will include the plural;
(ii) The gift was also exempt u/s 10(2) because the two conditions required to be satisfied for relief viz (1) that the assessee is a member of the HUF and (2) that he receives the sum out of the income of such HUF (may be of an earlier Year) were satisfied.
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