Management of retirement fund

This query is : Resolved

CA Shree Kant Ojha (Querist)
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17 October 2013 My client retired on aug. 2013 and he want to invest his retirement fund about 30 lac.
and monthly pension is 26,000 Rs. p.m. please tell how to manage his fund so that minimum tax payable.
in addition he has wife & one son.
please tell me all tax planning.
Any adjustment, gift, transfer or any other planning about tax planning or any way about tax saving.

CA Ravi Thakkar

CA Ravi Thakkar (Expert)
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18 October 2013 1. Your client may give gift to his son for that execute the gift deed.
2. Your client may create HUF and transfer some fund in Huf so if any income arises from that fund will be taxable in HUF.

CA Shree Kant Ojha

CA Shree Kant Ojha (Querist)
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18 October 2013
this is good that he can transfer this amount to his son. but
Mr Ravi there is clubing provision in transfer to HUF.

CA Ravi Thakkar

CA Ravi Thakkar (Expert)
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18 October 2013 HUF can take an interest free loan from Karta/members.

In my view, the income from loan will be taxed in the hands of the HUF and cannot be clubbed in the hands of the Karta/Member. Section 64(2) will be applicable only when the asset is transferred or converted into joint property of the HUF. In case of Loan, the same is not converted into common property of HUF so 64(2) will not operate.

CA Shree Kant Ojha

CA Shree Kant Ojha (Querist)
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18 October 2013 Mr Ravi
“property” includes any interest in property, movable or immovable, the proceeds of sale thereof and "any money" or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property.
so property includes money and there is clubbing provision attract on the transfer of fund into HUF.

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