Gift of shares to HUF

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This discussion clarifies that gifts of shares to a Hindu Undivided Family (HUF) from its members are generally tax-exempt under Section 56(2)(x) of the Income Tax Act, 1961. The HUF itself can also gift to its members without a limit. Importantly, capital gains arising from the sale of gifted shares by the HUF are not clubbed with the income of the original giver, except in cases of gifts to a spouse.

SHAHNH

SHAHNH (Querist)
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17 September 2023 Hello! Experts,

In my HUF, my Wife & Son are coparceners.
Can my wife gift shares to HUF. If yes What will be the tax implications. And if the gifted shares are sold by HUF, will the capital gains on it be clubbed in wife’s income.

Thanks in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2023
Gifts received by HUF from its members are exempted from Income Tax under Section 56(2)(vii) of the act. As per Hindu law, HUF is inclusive of all family members from a common ancestor, hence the limit of 50,000/- does not apply on HUF, excluding cash gift of more than Rs 50,000/-.
No clubbing.

SHAHNH

SHAHNH (Querist)
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17 September 2023 Thanks a lot for your inputs Sir.
Also advice if HUF can gift to it's members and is there any limit.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2023 Yes, no limit.....
....

SHAHNH

SHAHNH (Querist)
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18 September 2023 Thanks!
Will that action of gifting be considered as partial partition of HUF.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2023 No, it's not partition.

SHAHNH

SHAHNH (Querist)
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31 October 2023 Hello! Experts

Can my father gift shares, valuing around 75 lakhs to my HUF.

Thanks in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 October 2023 A gift of shares to family member as well as the HUF will be tax exempt as it would be classified as 'property received from a relative' which is specifically exempt on account of section 56 (2)(x) of the Income Tax Act, 1961.

SHAHNH

SHAHNH (Querist)
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01 November 2023 Thanks Sir!… will there be any clubbing of income provision for the giver of gifted shares

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 November 2023 Clubbing provisions applicable only in case of gift to wife/husband.

SHAHNH

SHAHNH (Querist)
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25 August 2025 Source: Moneycontrol
https://search.app/9XdTN

Hello Sir,
Came across an article explaining the clubbing provisions in case of HUF receiving Gifts. Please guide whether it holds true in recent times as we had discussed it before 2 years.
Thanks in advance.

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