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Tax on gift to HUF when given by Karta.


RAMESH SINGH   01 April 2020

RAMESH SINGH

 14 points

| My Other Post

Sir/Madam,
I am Karta of HUF. My individual PPF account matures now with around 25 Lacs. I want to transfer full 25 Lacs to my HUF to save tax as I am in 30% tax slab.
My question is
1-it right way to do so?
2-Tax implications on HUF
3-HUF invest full amount in shares then income earnings belongs to HUF or clubbing provision applicable as it solely do to save tax.
4-Is this have to be disclose any where and is there any wealth tax ?
Please suggest with your answer .
Thanks a lot.
R.K.Singh

Mandakulathur Ananthanarayanan   07 April 2020

Mandakulathur Ananthanarayanan

 10 likes  176 points

View Profile | My Other Post

1. Yes. Gift by HUF is not prohibited by any laws.

2. But it is to be noted that there will not be any tax savings becz of this exercise since the income would again be clubbed in the hands of Marta

3. Income from invested shares will be clubbed. But where that income is invested again, then income from accreted assets will not be clubbed.

4. No wealth tax. No income tax on gift of money because Karta and HUF are relatives.

1 Like

RAMESH SINGH   07 April 2020

RAMESH SINGH

 14 points

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Sir ,Thanks for your advice .
one more query if I gift all money to my son(major) which have no other income then if he invest all money in shares then tax outlook ?

Mandakulathur Ananthanarayanan   07 April 2020

Mandakulathur Ananthanarayanan

 10 likes  176 points

View Profile | My Other Post

Since your son is a major, clubbing provisions will not apply. And, income tax will not be levied on the transaction. This seems to be a better tax planning.

1 Like

RAMESH SINGH   07 April 2020

RAMESH SINGH

 14 points

View Profile | My Other Post

Sir, thank you very much for your guidance to make me better tax planning.


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