Huf corpus / capital

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 September 2015 Can the elder son of a family, which is yet undivided, form the small HUF of his own - consisting of himself, his wife & his son?

Can he transfer his past savings earned from Salary income, duly offerred for taxation in the respective years, to the HUF account for creating its corpus or capital?

If such a corpus or capital is invested in bank deposits or stock markets, are the interest income or the profits taxable in the hands of individual or HUF?

Amol S Joglekar

Amol S Joglekar (Expert)
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14 September 2015 Creating HUF as such is a MYTH.
There are some people who accept the GIFT in the name of HUF and then on the rationale of "Beggars have no choice" claim that HUF is formed with such GIFT. Every individual has to take the call on this when it comes to his/her own case.

Income tax has derecognised PARTIAL partition of HUF. So? Although under Hindu Law, one can have a partial partition, the same is NOT recognised under income tax act. It means under Income tax act, smaller HUF formed through partial partition can NOT file separate return of income.