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Gift received by HUF from karta or member

KAMAL (k ) (79 Points)

07 April 2010

pl let me know if any gift exceeding 50000 received by HUF from Karta or a member of HUF exempted. Also gift received by HUF from relative of Karta is taxable or exempt in case it exceeds 50000

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5 Replies

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 07 April 2010

^Dear,

^{Pls find the relevant extracts from the ACT itself}

^1a[(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,

(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;

(b) any immovable property,

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;

(ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consi-deration;

(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property;

(ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration :

Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections :

Provided further that this clause shall not apply to any sum of money or any property received

(a) from any relative; or

(b) on the occasion of the marriage of the individual; or

(d) in contemplation of death of the payer or donor, as the case may be; or

(e) from any local authority as defined in the Explanation to clause (20) of section 10; or

(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or

(g) from any trust or institution registered under section 12AA.

CA.TAPAS DALAR (CHARTERED ACCOUNTANT) (130 Points)
Replied 07 April 2010

Dear Mr. Sunil, there is no relevant part in the above relating to the definition of Relative of an HUF. Hence it is not clear so far as the taxability of HUF is concerned.

KAMAL (k ) (79 Points)
Replied 07 April 2010

As per the above section some one has to be a relative of HUF and relative is one as defined in defination of relative in act. HUF basically is Karta and even member and gift received from any relative of Karta at least comes in perview of the act otherwise in explanation it should have been clarified. The HUF has not been excluded in exempted category. This is what is my assumption. Also the section even specifies any gift received from any relative is exempt otherwise in that part The Word individual would have been explicitly mentioned

Ashish M (Chartered Accountant) (2731 Points)
Replied 07 April 2010

Any sum of money exceeding Rs. 50,000/- given by any member or karta of HUF to such HUF is taxable in the hands of such karta/ member of HUF because these r not covered in proviso to Sec.56(2)(vii).

The section is framed in such a way as first Sec.Sec.56(2)(vii) declares the amount recieved by individual or HUF from anybody is taxable. But proviso then comes in to exclude certain catagory of persons.

For individual, relative is excluded. But for HUF, since it can't have any relative, this exception can't be applied to it. Nor can we deem relative of karta to exempt the amount given by him to HUF basing our assumption that relative of karta is also relative of HUF. It would be foul assumption.

Hence any amoutn recieved by HUF from relative of karta is taxable bcoz it doesn't come in the proviso to Sec.56(2)(vii)

yashsr (CA) (2285 Points)
Replied 12 September 2012

Originally posted by : Ashish M
	For individual, relative is excluded. But for HUF, since it can't have any relative, this exception can't be applied to it. Nor can we deem relative of karta to exempt the amount given by him to HUF basing our assumption that relative of karta is also relative of HUF. It would be foul assumption. Hence any amoutn recieved by HUF from relative of karta is taxable bcoz it doesn't come in the proviso to Sec.56(2)(vii)

If Karta gifts Rs.15 lacs to its HUF from his personal file, Is this taxable in the hands of HUF or Karta's personal file?

And assuming the HUF invests the same in Fixed Deposit and earns Rs.150000 during the year, will it be taxable as HUF's income or will it be clubbed in Karta's personal income tax file?