Save Rs 499. Go Ad-Free with CAclubindia Pro for 2 Full Years. Subscribe Now!

Individual to huf gift/loan

2182 views 1 replies

ajay123

manager

40 Points Posted on 26 March 2012

After budget 2012 amendment provision u/s 56(2)

i have below query three query after this amendment:

1. Can income generated from HUF after gift recived from individual to huf will be taxable in HUF hand of individual hand (means section 64[2] will applicable after budget amendment,

2. if income generated from gift will be taxable in individual hand what is gift benefit????????

3.. can individual give loan to huf interest free after above budget amendment.

thanks

Please confirm:

1. If individual give interest free loan to HUF and HUF invested same amount recived from individual in Bank FD and erned interest amount on that so intrest erned by HUF will be of HUF only or individual.
2. whether section 64[2] will be applicable in this case because individual has given interest free loan.

thanks

Replies (1)

Sonam Bidasaria

770 Points Posted on 27 March 2012

1. Income from gift made to HUF shall be taxable in the hands of member hilself even after the amendment of Union Budget 2012. As the Budget only included in the explnation to Sec 56(2)(vii), the meaning of "relative " in case of HUF.

2. Interest will be taxable in the hands of individual, but interest on interest, will be taxable in the hands of HUF.

3. Even before the Budget also, individual could give loan to HUF fre of interest.