Gift from HUF to Relative of Karta

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Manish (Querist)
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31 July 2020 Dear Experts,
HUF is created by Grandfather (A) of the Family. After his death, his son (B) become Karta and after his death as well, his son (C) become Karta of the HUF. Now my question is,

1. Can HUF give gift its movable property to the sister of C (present Karta)?
2. If yes, is this gift is taxable or not?
3. If it is exempt, please confirm the section under which it is exempt.

Thanks in Advance...

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CA KARAN SINGH

CA KARAN SINGH (Expert)
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02 August 2020 Yes, HUF can give its movable property as a gift to the sister of C, but she should be member of HUF i.e., the sister should be unmarried.
2.) The gift given is not taxable as HUF is group of relatives (Decided by various case laws) and a gift from relatives is not taxable as per Sec 56(2) of Income Tax Act, 1961.

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