Introduction of capital in huf

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Mayur

Article

26 Points Posted on 06 September 2013

Hii Just wanted to know how to introduce capital in newly formed HUF And one more query if I gift 10 lacs rs as a individual to my HUF or my brother's HUF n then that money used as a loan n earned interest income then will that interest income clubbed in individual's income. Thanks Mayur Khandelwal

Replies (6)

shivam gupta

Student

174 Points Posted on 06 September 2013

HUF cannot GIFTs asset to members as per HUF Act.

CA LOVELY ARORA

C.A. B.Com (H) Graduate

1985 Points Posted on 06 September 2013

Dear Mayur,

the capital contribution in case of HUF is same as of sole proprietorship firm i.e. individual's own firm... just divert the personal money to HUF's bank A/c (opened for business of HUF), or through cash introduced as capital. Normal entries:- cash/bank Dr. .......... To Capital of HUF A/c....

If you gift more than Rs. 50000, then such amount would be taxable to HUF under "income from other sources", and sec. 64(2) clubbing provision will not apply here.. thus, taxable for HUF only...

Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com

CA LOVELY ARORA

C.A. B.Com (H) Graduate

1985 Points Posted on 06 September 2013

Dear Shivam,

Restriction is on making gift.. not receiving of gift...

kindly substantiate your point, if you are very much sure about it..

Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com

Mayur

Article

26 Points Posted on 06 September 2013

Thanks for your valuable response , Can u tell me how to introduce capital in Huf without payment of tax in any manner

CA LOVELY ARORA

C.A. B.Com (H) Graduate

1985 Points Posted on 06 September 2013

Dear Mayur,

There is no requirement of payment of Tax on introduction of capital, and regarding introduction of capital... you should follow the procedure as i stated before... i.e. transfer from own bank to HUF's bank, cash introduced etc.....