bishan singh negi (service) (104 Points)
24 April 2008hi forum,
i have a question if an huf gives interest free loan to its member and the member earned income on it . I would like to know whether income earned by member is taxable in the hands of HUF of its member,
No2 . if an huf gives gift to its member is this taxable or exempted.
thanks with regard
RAJENDRA
(CHARTERED ACCOUNTANTS)
(25 Points)
Replied 25 April 2008
Cash gifts made by an HUFare not exempted under section 56(2)(vi).
Interest free loans can be given by an HUF to it's members and the interest earned on such loans may not amount to diversion of oncome by over-riding title. After all, if the loan became bad would the member be exonerated from the laibilty to refund the amount to it's HUF.
bishan singh negi
(service)
(104 Points)
Replied 25 April 2008
CAclubindia
