Huf

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2012 Can a HUF gift to another HUF ?

Can a HUF gift to any person other than the member in excess of Rs. 50000/- ?

Can a huf gift to a person who would fall in the definition of relative u/s 56(2)?

Can a huf gift to any person other than the member with the consents of all the members in HUF?

deepali agarwal

deepali agarwal (Expert)

12 October 2012 HUF can receive gifts.It is a different issue that the gift received is taxable in the hands of the HUF . Care should be taken while drafting the gift deed. The gift deed should clearly mention the fact that the gift is to the HUF and to the karta in his individual capacity.

deepali agarwal

deepali agarwal (Expert)

12 October 2012 HUF is a seperate identity and is not related to any of its co-parcenors in their individual capacity hence gifts either ways must be limited to Rs 50000 per year and if more than Rs 50000 is gifted in a financial year, then the entire amount must be shown as a loan which must have a reasonable rate of interest attached to it and the interest payout can be considered as a legitimate expense for the Lendee and is a legitimate income for the lender.

deepali agarwal

deepali agarwal (Expert)

12 October 2012 “From a plain reading of Sec. 56(2)(vi) along with the application to that section and on understanding
the intention of the legislature from the section, it could be seen that a gift received from “relative”
irrespective of whether it is from an individual relative or from a group of relatives is exempt from tax under the provisions of section 56(2)(vi) as a group of relatives also falls within the Explanation to
section 56(2)(vi).

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