Gifting or receiving cash from member of h.u.f. or to a memb

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2013 Sir,
1)In H.U.F. can the members of it can gift in cash or transfer property to H.U.F.?
2)Is there any capping over it that beyond that limit the income would be taxed.?
3)Can H.U.F. receive any amount of cash (gift)from the family members & the friends of members of the H.U.F.?
4)If a member of H.U.F. gives an interest free loan to H.U.F.& then H.U.F. invests that money & is getting interest on it. Will that income be taxed on H.U.F. or its members?

I would be grateful to you. if you would answer my queries.

Regards

Saurabh

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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09 December 2013 1. A member can gift in cash or transfer property to HUF. The gift transaction is not taxable.

However, Section 64(2) checks such an exercise by the member. Income arising from such property will be clubbed in the hands of the member.
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2. No capping.
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3. HUF can receive gifts from all.
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The only difference in case of gifts received from non-members and members is,
the former is taxable if aggregate amount of cash so received exceeds Rs. 50000/-.
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4. This depends upon the facts of the case.
However, the motive of advancing such loan to HUF remains an important factor. If the AO finds that the device is adopted purely for reducing the tax liability and is detrimental to the interest of revenue, such clubbing procedure may be initiated by him taking a plea that income has been transferred without transferring the asset.
However, you may refer Section 60 for your information.
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