Huf

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This discussion explores the possibility of a son, employed in the IT sector, freelancing for his parent's Hindu Undivided Family (HUF) during his spare time. The core question is whether the HUF can receive freelance income and pay the son an honorarium, and what tax implications arise for the HUF. The conversation touches upon presumptive taxation (8% or 50% for individuals) versus actual basis for the HUF's tax liabilities.

ninad

ninad (Querist)
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02 April 2021 My son is working in it sector with on salary basis. He wants to work as freelancer in his spare time with another it company. Can he work as employee of my huf and get honararium from huf and the huf can get the freelance work fees as huf income? If yes, what will be huf's tax liabilities? Presumptive or actual basis?

CA Puja Sharma

CA Puja Sharma (Expert)
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02 April 2021 The HUF can claim presumptive income also.
The HUF will report the fees charges from customer after deducting the salary paid as business profit and pay taxes.
The taxes will be applicable on the basis of slab rates.

ninad

ninad (Querist)
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02 April 2021 Ok. Thanks mam for a prompt reply. I think presumptive for huf would be 8 percent. Right? Or is it minimum 50% as per individuals? Can I claim on actual basis also?

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