Money

Tax implications for gift from father’s HUF to son’s HUF

My HUF encompass me, my spouse, one single daughter and a son. I want to gift 15 Lakhs to my son’s HUF with consent to all of the members. My son’s HUF consists of himself, his spouse and two minor daughters. Will this gift be handled as revenue for my son’s HUF? Will the revenue from such gift be clubbed with the revenue of my HUF?

Answer: As per Section 56 of the Income Tax Act the presents obtained usually are not taxable within the arms of the recipient so long as the combination worth of all of the presents obtained by an individual through the year doesn’t exceed fifty thousand rupees. Once the combination quantity crosses the brink restrict of fifty thousand rupees, entire of the worth of all of the presents obtained through the year grow to be taxable within the arms of the recipient.

Gifts obtained from specified kin usually are not handled as revenue. Members of an HUF are handled as kin of the HUF for this function. So the presents obtained by an HUF from any of its members will not be handled as revenue of the HUF. Your HUF cannot be handled as member of your son’s HUF. So the total worth of the gift given from your HUF can be handled as revenue of your son’s HUF as the combination worth of the presents obtained by your son’s HUF exceeds the brink of fifty thousand rupees. The clubbing provisions apply when the gift is obtained by an HUF from its members and as defined your HUF cannot be handled as member of your son’s HUF, the clubbing provisions won’t apply and any revenue earned on this gift shall be taxed within the arms of your son’s HUF.

Balwant Jain is a tax and funding professional and might be reached at [email protected]

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