|QUERY:||A’s HUF consists of karta A and Members Mrs. A, S-1 and D-1. The HUF derives income of ₹ 3 lakhs as interest on FD with bank and agri. income of ₹ 10 lakhs.
Now HUF can make a reasonable gift to its members. Also income received by a member out of the HUF income is also exempt u/s. 10 (2).
What are the tax implications of receiving gift in the hands of member taking into account provisions of Sec. 10 (2) and Section 56 (2) (x) ?
It appears that there would be no liability in the hands of member concerned u/s. 56(2)(x) since the income itself is exempt u/s. 10(2). Is it correct?
|ANSWER:||Click here to read the full answer of the expert|
|EXPERT:||CA. H. N. Motiwalla|
|CATCH WORDS:||Income from other sources- Gift by HUF|
S. 56(2)(vii) was applicable up to March 31, 2017