I've just formed an HUF and a bank account in its name. Can I move 50lakh from my account savings account and make investment in the name of HUF? Would there be any tax implications for the HUF from this 50lakh transfer?
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HUF tax implications - investment
Replies (7)
Treat it as interest free loan by you to huf. No tax implications.
I see. Is it OK to give an interest free loan or do I have to charge some interest to avoid any complications in future?
Yes you can charge some interest. That would be really ideal and good defence. May be even 6%
I don't want to charge interest unless i have to. I'm doing this to save tax and if it comes back I'll have to pay 30% tax.
If i have to do it, can I give a deferred interest loan i.e get interest in 20 years?
Interest free loan is completely ok.
If u give interest free loan but HUF earn income therefrom it may be questioned as diversion of income
Under which section, can they add notional interest income ? It is very well possible to answer such question. Not to worry.
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