Dear All,
Is there any restriction on HUF regarding payment of salary to it's members or what are the provisions in this context??
Regs,
RKG
2 Replies
Pavan Jain S
(Chartered Accountant)
(1575 Points)
Replied 17 February 2009
In my opinion, HUF can pay salary to its member unless it is considered reasonable u/s 40A(2)
V.K.SUBRAMANI
(chartered accountant)
(56 Points)
Replied 17 February 2009
WHERE THE HUF CARRIES ON A BUSINESS, IT CAN PAY SALARY TO ANY MEMBER WHO PUTS HIS INDIVIDUAL EFFORT . IN MY OPINION SALARY PAID FOR INDIVIDUAL EFFORT IS ALLOWABLE SUBJECT TO REASONABLENESS CONTAINED IN SEC 40 A(2) OF THE ACT.
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