Opinion Of Eminent Legal Luminaries On Controversial Issues

Income from other sources- Gift by a member to HUF

QUERY: Gift to HUF by members:
a) What will be the tax implications of a gift by cheque (sum of money), given by a member to the HUF?
b) Whether the member will be considered as a relative as defined in explanation to clause (vii) of section 56(2) and consequently the gift not considered as income from other sources for the HUF as per section 56(2)(x)(a)?
ANSWER: A gift by a member to HUF is not taxable as per section 56(2)(vii) read with Explanation to section 56(2)(x). Section 56(2)(vii)(e) provides “relative means” -
(i) In case of an individual –
a) Spouse of the individual;
b) Brother and sister of the individual
c) Brother or sister of the spouse of the individual
d) Brother or sister of either of the partners of the individual
e) Any lineal ascendant or descendant of the individual
f) Any lineal ascendant of descendant of the spouse of the individual
g) Spouse of the person referred to in items (b) to (f) and
(ii) In case of Hindu Undivided Family, any member thereof

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Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
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