TRANSFER OF SOLE PROPERITERSHIP BUSINESS TO HUF

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This discussion addresses the transfer of a sole proprietorship business to a Hindu Undivided Family (HUF). It clarifies that the HUF must pay consideration based on market valuation to avoid the difference being treated as a gift. The consensus is that there are generally no significant tax benefits compared to receiving a gift from a relative.

tarun singh

tarun singh (Querist)
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07 June 2024 Will HUF pay any consideration if it acquires a sole properitership business and properiter is co parcener in HUF? Is there any tax benefit of doing it?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 June 2024 Yes, need to pay as per market valuation; otherwise difference will be treated as gift.
As such there won't be any tax benefit, as otherwise gift from relative.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 August 2024 Good luck.

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