Query related to interest free loan to huf by karta

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I am an individual in 30% tax bracket. I am also Karta of my HUF. To save tax on FD interest I want to give interest free loan to my HUF and do FD from HUF account. I have following questions related to this.

1. What documents do I need to keep when I give interest free loan to HUF ? Do I need to mention when HUF must return principal amount back to Karta or it can be left open where HUF can return the principal whenever it wants to ?

2. Will interest free loan will attract clubbing provision on interest earned by HUF on FD ? I have searched on net and there are mixed information available. Some experts say income generated by loan doesn't come under clubbing provision while others say opposite.

3. When Karta gives interest free loan to his HUF does Karta need to declare the loan in his ITR ? Does HUF need to declare loan in its ITR ?

Replies (3)
1. bank records are sufficient
2. not applicable
3.Yes

Thanks.

Followup question : If I just keep the bank record for the transfer then how do income tax department will differentiate between gift v/s loan v/s interest free loan. Does it help to keep a record on plain paper detailing the loan amount and condition, which is signed by HUF Karta, and Karta ?

good clarification and information

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