Gift by huf to its member

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neha mathukiya (Querist)
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06 February 2016 We have formed HUF say V.M. Mathur(HUF). Mr. V. M. Karta of HUF gifted Rs.2000000.00 by way of cheque Mrs. Mathur wife of Karta & also member of HUF.

What will be the tax liability?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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06 February 2016 Gift received by HUF from its members is not taxable u/s 56(2)(vii). However, gift received by a member from his / her HUF is taxable under the same section. Instead of gifting, make a partial partition of the assets, then such assets are covered u/s 2(14) i.e. capital asset and 'partial partition' is not regarded as transfer u/s 47.

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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07 February 2016 The properties of the HUF can be enjoyed jointly. However, that does not mean that, a property cannot be used by the members severally. In case of any need, such as marriage, higher studies, health care etc. the same may be equitable to use by any member of the HUF and shall be deemed to be used for the benefit of the family. Equitable principles considerably influences the decisions of the courts...and these are above the prevailing law of the land.

Gift is not necessary.

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