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VIJAY GUPTA (PARTNER )     03 July 2011

Huf

Is Gift received\given by huf from the relatives of karta is taxable or not under section 56 of income tax act 1961?



 6 Replies

kamal kishor sen

kamal kishor sen (STUDENT Rajasthan)     03 July 2011

Hindu Undivided Family (HUF) is a separate entity as per the Income Tax Act,1961 (“the Act”) although it is not a natural person but has an identity as an artificial person which is managed and controlled by its Karta & other  Coparcener.

As the act specifies that gift received in excess of Rs. 50,000 from person other than relatives shall be treated as an Income of the assessee, the HUF being an artificial person, no other person can be a relative of HUF. So, gift received in excess of Rs. 50,000 from karta & other members are taxable in the hands of HUF under the head “income from other sources”.

  • Gift received in the nature of sum of money:

If the aggregate sum of money received by HUF during the financial year from any person or persons exceeds Rs. 50,000 in aggregate, the whole of such sum shall be chargeable to income tax under the head ‘income from other sources”.

  • Gift received in the nature of immovable property:

If any immovable property is received by HUF without any consideration and the value of such property for stamp duty purpose exceeds Rs. 50,000, the value of the property for stamp duty purpose shall be taxable under the head “income from other sources”.

  • Gift received in the nature of properties other than immovable property:

If any property other than immovable property is received by HUF without any consideration and the fair market value of such property exceeds Rs. 50,000, then the fair market value of such property shall be taxable under the head “income from other sources”.

Likewise, gift given by HUF to its members will be taxable in the hands of the recipient as per the provisions of section 56(2) of the act.

1 Like
CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)     03 July 2011

Originally posted by : kamal kishor sen












Hindu Undivided Family (HUF) is a separate entity as per the Income Tax Act,1961 (“the Act”) although it is not a natural person but has an identity as an artificial person which is managed and controlled by its Karta & other  Coparcener.



As the act specifies that gift received in excess of50,000 from person other than relatives shall be treated as an Income of the assessee, the HUF being an artificial person, no other person can be a relative of HUF. So, gift received in excess of50,000 from karta & other members are taxable in the hands of HUF under the head “income from other sources”.





Gift received in the nature of sum of money:





If the aggregate sum of money received by HUF during the financial year from any person or persons exceeds50,000 in aggregate, the whole of such sum shall be chargeable to income tax under the head ‘income from other sources”.





Gift received in the nature of immovable property:





If any immovable property is received by HUF without any consideration and the value of such property for stamp duty purpose exceeds50,000, the value of the property for stamp duty purpose shall be taxable under the head “income from other sources”.





Gift received in the nature of properties other than immovable property:





If any property other than immovable property is received by HUF without any consideration and the fair market value of such property exceeds50,000, then the fair market value of such property shall be taxable under the head “income from other sources”.



Likewise, gift given by HUF to its members will be taxable in the hands of the recipient as per the provisions of section 56(2) of the act.
1 Like
CA ADITYA SHARMA

CA ADITYA SHARMA (CA IN PRACTICE )     03 July 2011

Originally posted by : kamal kishor sen








Hindu Undivided Family (HUF) is a separate entity as per the Income Tax Act,1961 (“the Act”) although it is not a natural person but has an identity as an artificial person which is managed and controlled by its Karta & other  Coparcener.



As the act specifies that gift received in excess of50,000 from person other than relatives shall be treated as an Income of the assessee, the HUF being an artificial person, no other person can be a relative of HUF. So, gift received in excess of50,000 from karta & other members are taxable in the hands of HUF under the head “income from other sources”.





Gift received in the nature of sum of money:





If the aggregate sum of money received by HUF during the financial year from any person or persons exceeds50,000 in aggregate, the whole of such sum shall be chargeable to income tax under the head ‘income from other sources”.





Gift received in the nature of immovable property:





If any immovable property is received by HUF without any consideration and the value of such property for stamp duty purpose exceeds50,000, the value of the property for stamp duty purpose shall be taxable under the head “income from other sources”.





Gift received in the nature of properties other than immovable property:





If any property other than immovable property is received by HUF without any consideration and the fair market value of such property exceeds50,000, then the fair market value of such property shall be taxable under the head “income from other sources”.



Likewise, gift given by HUF to its members will be taxable in the hands of the recipient as per the provisions of section 56(2) of the act.

AGREED                  

VIJAY GUPTA

VIJAY GUPTA (PARTNER )     03 July 2011

Dear friends,

it may be a right answer but this answer is no accepted by the ITAT in its recent judgement given in case Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot) on 30th june 2011
(119.2 KiB, 600 DLs)

praveen

praveen (Chartered Accountant)     03 July 2011

Originally posted by : VIJAY GUPTA

Dear friends,

it may be a right answer but this answer is no accepted by the ITAT in its recent judgement given in case Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot) on 30th june 2011
(119.2 KiB, 600 DLs)

 

Please put in the text of the case.

But generally it is taxable.

VIJAY GUPTA

VIJAY GUPTA (PARTNER )     04 July 2011

Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot) on 30th june 2011


HUF is a “relative” for gifts exemption u/s 56(2)(v), (vi) & (vii)




The assessee received a gift of Rs. 60 lakhs from his HUF. The AO &
CIT(A) held that as HUF was not covered by the definition of
“relative”, the gift was chargeable to tax u/s 56(2)(v). The alternate
submission that gift was exempt u/s 10(2) was rejected on the basis
that s. 10(2) applied only to amounts received “out of income of the
estate” on partial or total partition of the HUF. On appeal by the
assessee, HELD allowing the appeal:



(i) S. 56(2)(v) exempts gifts from a “relative”. Though the definition
of the term “relative” does not specifically include a Hindu Undivided
Family, a ‘HUF” constitutes all persons lineally descended from a
common ancestor and includes their mothers, wives or widows and
unmarried daughters. As all these persons fall in the definition of
“relative”, an HUF is ‘a group of relatives’. As a gift from a
“relative” is exempt, a gift from a ‘group of relatives’ is also
exempt since the singular will include the plural;



(ii) The gift was also exempt u/s 10(2) because the two conditions
required to be satisfied for relief viz (1) that the assessee is a
member of the HUF and (2) that he receives the sum out of the income
of such HUF (may be of an earlier Year) were satisfied.
 


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