Transfer of property by karta to HUF

Rental income is taxable in the hands of the owner. If the property is validly transferred to the HUF and HUF becomes the legal/beneficial owner, rent can be offered in HUF’s hands. However, if the Karta/member has transferred his self-acquired property to HUF without adequate consideration, Section 64(2) clubbing provisions may apply and income may still be taxable in the hands of the transferor. Proper deed, mutation, books of HUF and source/nature of property should be checked.