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Huf and income tax

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(Querist)
25 March 2012 Whether in inter family transactions (Including loan to and from HUF)interest is required to be paid compulsarily at market rate or we can claim less or no interest?
Please reply asap
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
26 March 2012 No to the extant of the capital it is not required but if you have borrowed the same and then you are giving it to the HUF then it is required. The same law applied to other family members
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CA PARTH SHAH

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CA PARTH SHAH (Expert)
14 April 2014 PROBLEM OF NOT CARGING INT OR CHARGING INT AT LOWER RATE ARISE IF YOU ARE CHARGING INT FROM THE OUTSIDERS AT A DIFFERENT RATES. sUCH TRANSACTIONS FALLS UNDER RELATED PARTY TRANSACTIONS U/S 40A(2)(b) of the income tax act 1961 in which if the expenditure with the related party are not done at the arms lenght price, such difference is chargable to tax.
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