Huf gifting shares to 1 member

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Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2015 An HUF is holding shares in pvt amd pulblic ltd companies. These companies are not listed. If the HUF gifts these shares to 1 member with the consent of the others, will there be any tax liability on the member receiving the shares?

Amol S Joglekar

Amol S Joglekar (Expert)
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23 January 2015 No.
(Section 56 of Income Tax Act.)

Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2015 Kindly reply in detail as in my search it was coming that a member can gift to HUF without any taxability but when HUF gives a gift to member which in above 50000 and is not from the HUF'S current income tax will be liable. Kindly provide some case law or explain in detail

Amol S Joglekar

Amol S Joglekar (Expert)
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23 January 2015 Your contention is CORRECT.

But let us put it this way....When distribution of asset/income by HUF can be done without attracting section 56, why do you want to call it as GIFT?

Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2015 Pls explain....could not understand

Amol S Joglekar

Amol S Joglekar (Expert)
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24 January 2015 Why do you want to DESIGNATE it as GIFT.
HUF can as and when thought fit, distribute its assets

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