Please confirm:
1. Can individual give interest free loan to HUF
2. If 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
Ajay, Loan is a completely different transaction. Section 64 says that income to be clubbed if the income earning asset is transfered without adequate consideration.
In case of a loan, the asset is not transferred but still belongs to the individual.. hence clubbing would not be attracted and will be taxed in the hands of HUF.
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