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
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Salary to its members by HUF
Replies (2)
In my opinion, HUF can pay salary to its member unless it is considered reasonable u/s 40A(2)
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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