HUF tax implications - investment

Tax planning 200 views 7 replies

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?

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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