Huf

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Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2014 hi i want to know whether Huf can take gifts from relatives & gift will be exempt from tax or not

TKKKKKK

TKKKKKK (Expert)
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26 April 2014 Yes, gift from relative by HUF is exempt. There is no ceiling limit and entire sum or property received shall be exempt. Please see the relative definition first.

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2014 thanks for reply taranum, please clarify my i have read somewhere that huf can't have relatives. If father have huf account & earning income & son have huf account & earning income both have to file itr seperately or their income will be merged.

TKKKKKK

TKKKKKK (Expert)
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28 April 2014 https://www.caclubindia.com/articles/all-about-huf-its-creation-and-tax-benefit-17879.asp#.U13lZKiSypc

I think this will help u

Querist : Anonymous

Querist : Anonymous (Querist)

28 April 2014 thanks taranum.........@

Querist : Anonymous

Querist : Anonymous (Querist)

28 April 2014 https://www.taxmann.com/TaxmannFlashes/Articles/flashart13-7-11_DTL_1.htm?aa=

Hi Taranum please read that, i am confused after reading that regarding gift from relatives are exempt or not for huf.

Querist : Anonymous

Querist : Anonymous (Querist)

28 April 2014 file:///C:/Users/harshit.chauhan.EFFECTUAL/Downloads/Section%2056%282%29%28vi%29%20%20%20Gifts%20received%20from%20Friends,%20Relatives%20or%20from%20NRIs%20could%20be%20Exempt%20from%20Income%20Tax%20!%20How.htm

Hi Taranum please read that also in this also mentioned huf can't have relatives.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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28 July 2024 Let's break down your queries regarding HUFs (Hindu Undivided Families) and their tax implications:

### 1. **Gifts to HUF from Relatives**

**Tax Exemption on Gifts:**

- **Gifts to HUFs:** Generally, gifts received by an HUF from relatives are exempt from tax. According to Indian tax laws, gifts received by an HUF from relatives, such as parents, siblings, and other relatives as defined under Section 56(2)(x) of the Income Tax Act, 1961, are not subject to tax.

- **Definition of Relatives:** For tax purposes, relatives include lineal ascendants and descendants, which means gifts from close relatives like parents, siblings, and in-laws to an HUF are typically exempt.

- **Gift Declarations:** Even though gifts may be exempt, it's crucial to maintain proper documentation to prove the relationship and the nature of the gift in case of any scrutiny by the tax authorities.

### 2. **Filing Income Tax Returns for HUFs**

- **Separate Filing:** Each HUF is considered a separate legal entity for tax purposes. If a father has an HUF and a son has another HUF, both HUFs need to file their own income tax returns separately. Their incomes are not merged or aggregated; each HUF will file its own return based on its income and claims.

- **Separate Taxation:** Each HUF will be taxed individually on the income it earns, and they will be subject to tax as per the applicable slabs for HUFs.

- **Income Splitting:** The income of one HUF cannot be transferred or combined with another HUF’s income for tax purposes. They are treated as distinct entities by the Income Tax Department.

### Summary:

1. Gifts received by an HUF from relatives are generally exempt from tax.
2. Each HUF must file its own Income Tax Return separately, and their incomes are not combined.

If you have specific cases or complex scenarios, it might be a good idea to consult a tax professional or financial advisor to ensure compliance with current tax laws and to get personalized advice.

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