Creating and funding to huf

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This query is : Resolved

Mukesh J Ladia (Querist)

23 April 2016 After marriage of my son, I can create his HUF. Let me know how much fund I can give to his HUF in a year and what is tax liability on income of that fund ?

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

25 April 2016 As per income tax law, for an HUF its members are relative persons. Since you are not a member of your son's HUF (consists of son, his wife and his children) you can only provide funds up to Rs. 50,000/- beyond which entire gifted funds will be treated as income of HUF. But in gift deed specifically mention that gift is made to son's HUF and not to him individually.

Mukesh J Ladia

Mukesh J Ladia (Querist)

25 April 2016 Yeah, I knew that I can not be coparcener of my son's HUF, but can't I gift more than 50000/- per year without gift Tax or clubbing of income problem ?

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

25 April 2016 See there is no clubbing of income as you are not transferring you funds to your own HUF. As I said, if you gift more than 50000/- as gift in a year it will be taxed in the hands of your son's HUF under section 56 which doesn't allow non relatives to gift more than the stipulated sum of Rs. 50000/-.

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