Can a member of HUF give the initial capital to HUF when the bank account is opened for the first time on the name of HUF ? or only my grandfather can give that initial capital to HUF ?
In our case my Father(Karta) gave a cheque of 1lac from his bank accnt to HUF bank account. Now can we show that 1 lac as a gift from my Father to HUF for creation of HUF or shold we show it as a Loan(asset) in father's balance sheet and Loan(liability) in HUF balance sheet ?
Yes, HUF can take gift from members, exempt or tax-free. better to treat it as loan.
Why treating it as a loan is better? Please tell.
1. HUF can swallow gifts, but cannot give gift/s except for some special occassions. Capital locked.
2. Clubbing provision, shall not relieve member donor from any tax liability. etc.
Murali and Sumeet Chartered Accountant
Bengaluru
CA Foundation
View Details
Interactive Media Pvt Ltd.
New Delhi
CA Inter
View Details
Subrahmanyam & Sivudu CA Firm
Hyderabad
CA Inter
View Details
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
View Details
CCI
Pro
CAclubindia
