Business income from huf - case of government servant

Tax queries 4121 views 6 replies

Silki Garg

30 Points Joined February 2009

I am a Government Servant having HUF with me as Karta, my wife and two minor daughters as co-parceners. My conduct rules do not allow me to engage myself in any business activity. Government rules say that you need to yearly disclose the incomes and assets of both yourself and wife and all dependents.

My wife does some freelancing job from home generating income, which is received partly in her individual name and partly in the name of HUF.

My queries are…

If my wife does not share her income and asset details with me, how can I disclose them to my employer (Government). By which rule she is bound here? Can I simply say that my wife has refused to share her details with me so I cannot submit them to the Government.
If my wife generates business income for HUF, am I violating any rule, which prohibits me to engage in any sort of business activity outside my service?
Is it possible that I can transfer the rights of Karta (i.e. managing the finances / investment) of HUF to my wife through some declaration / affidavit etc.?
Government employees are required to submit every year the return of incomes and assets of themselves, their spouse and their dependents. Does it also include HUF also?
I have not yet submitted this for last several years. Can I do so now? Is there any adverse consequence to that?

Replies (6)

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

1. according to me, if your wife's income is being declared in itr then i dont think it should be a problem in declaring this income to govt.

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

huf is considered as diff entity than individual, therefore even if you are karta of such huf, it cant be said that you were engaged in any business activity outside of your service. so you are not violating any terms of your service.

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

a female can become a karta, but only when the male members are minors or are not in a position to manage the affairs and give a declaration to that effect and seek the permission of the Department to allow the female to manage. Champa Kumari Singhi v Revenue (1962) 46ITR81 (Cal). ..... Moreover, when an existing HUF is reduced to only female members, it can still continue as an HUF with one of the females as a karta. This is in view of the existence of the potential coparcenary as any widow may, in future, induct a coparcener into the family by adoption. CIT v RM AR AR Veerappa Chettiar ('70) 76ITR467 (SC)

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

4. according to me, huf income should also be declared..... 5. you wont be able to declare anything relating to previous years as there is some time limit for such declaration.

Silki Garg

30 Points Joined February 2009

Originally posted by : Tribhuvan Aditya Singh
	1. according to me, if your wife's income is being declared in itr then i dont think it should be a problem in declaring this income to govt.

Hi Tribhuvan,

Thanks for your answers.

Yes, she has been filing her ITR's religiously for past several years.

But my question is, suppose she doesn't want to share the details with me or Government, what should be done. Is there any rule, which can force her or me to declare her assets and incomes?

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

https://www.moneylife.in/article/now-govt-staff-will-have-to-declare-assets-annually/38201.H T M L

please visit this link for more details.... it says it is mandatory for govt. staff to declare assets annually and requires information of spouse of staff also. but declaration of wife's income is mandatory or not has not been cleared to me.