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)

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)

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)

31 August 2024 Good luck.

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