HUF - Income from Commission

Yes, HUF can earn commission over sales volume, if HUF is proprietor of the said business.

Thanks for the reply.

HUF has no business, he has just given an client to the good traders and on that ground trader will release the commission on total sale turnover.

Need an deep clarity 

will this commission will added to HUF or on individual account ?

To Karta's account.               

HUF is a virtual body, though it can earn comission?

Commission needs personal skills then to it will not added to Individual pan ?

In case is selected for scrutiny A.O. will directly hit this point.....

this is not HUF's income because comission income needs personal skills.

HUF has pan and seperate bank account.

I think you have understood that Karta is not HUF, but an individual.

Hello sir ... I need advice on two Scenarios please : Scenario 1   If my wife (Co Parcener of the HUF) GIFTS her shares worth more than 10 Lakhs to our HUF DEMAT  , upon sale of the shares by  HUF DEMAT, be it Long term or Short term- A. will the Cap Gains be Clubbed to my wife’s account? B. I also presume ,The Gifted shares to HUF is Gift Tax free. Thanks in Advance for your reply and advice

sir.., Hypothetical Scenario 2  If my wife GIFTS her shares worth more than 10 Lakhs to my  MOTHER IN LAW, upon sale of the shares by my Mother, be it Long term or Short term-  A. will the Cap Gains be Clubbed to my wife's account?  B. I presume ,The Gifted  shares will not Incur any Gift Tax in the hands of my mother.Thanks in Advance for your reply and advice

1. Gift to HUF by its coparcener/s is tax exempt but clubbing provision u/s. 64(2) IT act applies. So the gains will be taxed in the donor's hand.
2.  Period of holding is inclusive of the period holded by donor also.

1. Period of holding is inclusive of the period holded by donor also.
2. Gift tax exempt to mother in law.
3.  No clubbing provision. On sale of shares the gains will be taxed in the hands of MIL.

Sir.., 

Many thanks for Crystal clear explanation. Appreciated.

Regading the HUF scenario, which you kindly gave clarification on, Could you please kindly let me know asto this applies for a NRI aswell ? Or the rules are universal.

Myselves and my wife are NRIs based outside of India and perse regarding the Indian Tax system, there is No change in Gift Tax  for NRIs, I presume.

Yes, the rule is same for all the assessees as per IT act, 1961. You need to check the compliance as per the country of your residence as well.

Sir., Further to this..., Subsequently, lets consider a situation wherein,  the HUF as an entity invests in its own DEMAT account from the funds that it has generated (Post tax)  in its account following the initial sale of the Gift shares recieved as above in the discussion.

In the scenario, the subsequent Capital Gains generated on further subsequent investements by the HUF, the tax  will be clubbed to my wife  once again or will it become the liability of the HUF only aS IT WILL BE  income   earned on its individual capacity ?

Or, are there any rare clause that will state the Capital Gains generated tax be pegged to the Karta as HUF  income requires personal skills, and therefore, it should not be assessed as HUF’s income.

Thanks in advance

Scenario 2.  Likewise, Subsequently, lets consider a situation wherein,  the HUF as an entity invests its post tax funds ,following the initial sale of the Gift shares recieved as above in the discussion,  in a company.

The subsequent profits generated as a result of the investment into the company by the HUF entity be clubbed to the Karta or in the hands of HUF only as an  income  earned on its individual capacity?

Thanks in advancefor your reply and advice