HUF - Income from Commission

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Quick Summary
HUF can earn income like commission or business income if it arises from its own activities and not personal skill of Karta. Income is taxable in HUF if HUF is a separate entity undertaking business/investments. Clubbing rules may apply in some gift cases under Section 64, depending on structure.

  1. Subsequent sell of shares will be assessed in the hands of HUF only. No cascading effect.
  2.  Investment is not an special skill of any individual. HUF is allowed for shares investment, as such the gain will be assessed in HUF PAN and not in Karta's hands. 

HUF can do businesses (& not specific professions). Shares investment is either investment or trading (i.e. business) which HUF can handle. As such any income earned from such events is HUF income, and not of Karta.

What all contractual incomes can be taken under HUF ? and the said income not to be clubbed in Karta A/c ?

Please specify the list of contractual income. 

  1.  https://www.charteredclub.com/huf-capital/

 

   2.  https://www.forbesindia.com/article/explainers/hindu-undivided-family/93814/1

 

can HUF enter into Event Service Contracts ?

It will be pure income of HUF and not club to individual ?

Yes.                          

thanks .. While filing ITR we need to mention "business income from Contracts" ? or else 

The name, nature and some details of the business with its code.

Dear Mr Dhirajlal Rambhia Can you throw some light in continuation of the HUF discussion (Gift of equities from Co Parcener to HUF and clubbing scenario)  , please.

lets consider the following scenario.

Initially, as discussed, The Co Parcener gifted some shares(Equities) to the HUF as a Gift, wherein,  as per the previous discussion, there was no Gift Tax but there was clubbing rule associated. 

Now, after holding those Gifted shares for a period of time, If the HUF Gifts the same shares (Equities) to a. Kartas mother, or b. the Co Parcenors mother , without selling the shares, will there be any Gift Tax to anyone and More so importantly, will there be any clubbing of tax to anyone, please

It is controversial  issue. AO will tax it in the hands of HUF, with option for appeal against the order.

Refer:   https://www.caclubindia.com/articles/gifts-to-and-from-huf-20454.asp

As on date any sum received by members from their HUF is taxable, if 

i) It is above threshold limit as provided in Section 56(2)(vii); and

ii) It is not in conformity with conditions prescribed under Section 10(2).

In other words, if conditions stipulated in 10(2) are complied then the income itself will not be included in ‘total income’ and thus it will not reach to the stage of charging/exemptions under Section 56(2). Thus, in context of above statement, for making the income, being received by individual from his HUF, taxable in hands of individual, there should be a non-compliance of conditions of 10(2) and amount should exceed R50,000/- in aggregate.

Dear Sir

Many Thanks for the  explanation. Thanks for the link that you have provided. Just got a querry " As on date any sum received by members from their HUF is taxable" - Was it a Mistypo?  Is it Members or Non Members, Please?  WE are talking about Gifting the shares (Equities) held by HUF to either Members or Non Members.

A. Do you mean to say, Gifting of assets (Shares) by the HUF to the Members will be taxed?

B. What about , Gifting to Asset (Shares) by the HUF to Non Member of HUF, but Blood relatives, will be taxed?

The article was confusing to my interpretation. I would appreciate your kind explanation  please, If you dont mind  Many Thanks in Advance

 

Our query was based on gifting the shares by HUF to its member/s or coparcener; and based on that above reply is given. There is no type error in answer, it is the summary (point no. 4) as from the liked artical.

To HUF only its memebrs are relatives, there is no concept like blood relative to HUF.

Any gift by HUF to any other person is taxable.

Your points are well-explained. Anyone searching for a reliable dental clinic should always look for qualified and experienced professionals.

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