If I give a gift of 2.00L to my Brother & 2.00L to my brother's HUF, will both get clubbed into his personal file or will it be treated separately ?
I assume it will not be taxed.
Pls advice.
Thx
Amir
(Learner)
(4016 Points)
Replied 02 March 2010
Dear Sanjay Sir,
The gifts will not be taxable in ur hands I mean no tax treatment would be done in the hands of the person who has gifted money......
In the hands of receipient -
1) Brother - Falls in the definition of "relative" as defined under Sec 56, therefore will not be taxable
2) Brother's HUF -Unfortunately this is not covered therefore HUF will have to pay tax on this amount of Gifft.
Clubbing of both amounts will not be done if individually transactions can be traced or can be proved by documentary evidences, etc
Better option would be either to show the amount as "Loan"
or first tranfer the entire 4 lacs to ur Brother, out of which ur brother could advance Rs. 2 lacs as "loan" to his HUF..Remember Brother cannot gifts/dIrectly give his share of money to HUF otherwise clubbing will be done.
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