Huf business - can a minor generate income

Tax queries 525 views 3 replies

Silki Garg

30 Points Posted on 04 August 2014

Hi seniors,

Need advice of seniors and professionals on this great forum.

I am a Government Employee with an HUF consisting me as Karta, my wife and two minor daughters. My wife is doing some online freelancing work, which generates some income. Some part of this income gets collected in her name and rest gets collected in the name of HUF.

Now my query is...

Is it necessary to show the entire income in my wife's name?

Is it possible to show that the my wife is doing the business in two capacities. One as an individual and one as the member of HUF owned business. Can I show that my minor daughters are also engaged in the HUF owned business and the income generated out of the combined efforts of the three gets collected in HUF account. The income generated out of the individual efforts of my wife gets collected in my wife's account.

Is ther any inherent flaw in this arguement?

Kindly guide and advice.

Replies (3)

Anubhav

Chartered Accountant

429 Points Posted on 04 August 2014

Hi,

It is not necesary to show the entire income in your wife's account. You need to open a bank account in the name of HUF and transact that income through this account.

For any further query PM or mail me.

AJH & CO.

anubhavjain @ ajhco.in

Silki Garg

30 Points Posted on 04 August 2014

Originally posted by : Anubhav
	Hi, It is not necesary to show the entire income in your wife's account. You need to open a bank account in the name of HUF and transact that income through this account. For any further query PM or mail me. AJH & CO. anubhavjain @ ajhco.in

Hi Anubhav,

Thanks for the reply.

My specific query is as follows.

Can the minor participate in the business of HUF? If yes, then only it may be possible to show the income in HUF's name.

If the minor cannot participate in the business of HUF, then there is only one adult person (i.e. my wife) who is running the business. In that case, the entire income is generated because of her effrots and so should be collected in her individual account. Please note that I cannot participate in the business being a Government employee.

So, the entire question bois down to one query...

Can the minor daughters participate in the HUF business?

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Posted on 04 August 2014

it is not necessary that minor should take part in business of huf. income will be of huf only if it is deposited in huf account, though it is earned by sole effort of wife. income of wife in individual capacity will be her income and any income on account of her effort for huf will be income of huf.