Gift received by HUF

Is gift received by HUF from its karta taxable?

hi,

I am sorry for putting a question instead of replying .

my question what is the legal procedure for distributing huf funds like bank balance to its member.

no 2 if huf give gifts to its member is this right or wroung as  per income tax.

Thanks with regard for all of u guys.

Please let me know, how can i increase the capital of my HUF without doing business, i.e. can i take gifts from members of my HUF (if yes whether it is taxable), also can i take gifts from my non blood uncle (if yes whether it is taxable). Please relpy me on jineshwar @ rediffmail.com

Please let me know, how can i increase the capital of my HUF without doing business, i.e. can i take gifts from members of my HUF (if yes whether it is taxable), also can i take gifts from my non blood uncle (if yes whether it is taxable). Please relpy me on jineshwar @ rediffmail.com

Please let me know, how can i increase the capital of my HUF without doing business, i.e. can i take gifts from members of my HUF (if yes whether it is taxable), also can i take gifts from my non blood uncle (if yes whether it is taxable). Please relpy me on jineshwar @ rediffmail.com

If u want to increase the capital of huf you can takeloan from some person or loan from the relative. you can also opt for gift from person(exempt upto Rs.50,000).

In my opinion instead of taking a gift (upto Rs 50000 is permitted from relatives) you could take a loan from a bank. In circustances where loan is not offerred by the bank to a huf you could lien Fixed deposits to a bank in individual names and take an OD facility in the name of the HUF upto 95% of the FD amount. The intt charges on the OD could be deducted from taxable income considering the OD funds are being used to generate the income.

I my opinion HUF is a seperate identity and is not related to any of its co-parcenors in their individual capacity hence gifts either ways must be limited to Rs 50000 per year and if more than Rs 50000 is gifted in a  financial year,  then the entire amount must be shown as a loan which must have a reasonable rate of interest attached to it and the interest payout can be considered as a legitimate expense for the Lendee and is a legitimate income for the lender.

To your query regarding distribution of HUF funds, I feel all co parcenors including Karta have an equal share in the asset base of a HUF since funds that flow into a HUF at formation (in the form of  gifts/propert from lineal ancestors)  are for the benefit of a family unit in its entirety and all co parcenors have an equal claim. HUF can be dissolved in case the assets dry up however it serves as a great tax saving tool and one must continue to utilize it to save taxes.