Income generated from gift to HUF

by Sanket
(Mumbai)

If the Karta of an HUF gives a gift to his own HUF, and the HUF generates income out of it, will this HUF income be clubbed with the Karta's income for income tax purposes?

Reply from M/s.V.Krishnan & Co.:

As per section 64(2), where the member of a HUF (a Karta is also a member of the HUF) transfers, directly or indirectly, any property to the HUF without adequate consideration, then the member making the transfer shall be deemed to be the Owner of such property and the income accruing or arising from such property shall continue to be chargeable in the hands of such member.

Even after partition of the HUF, if the property so transferred by the member is received by such member’s spouse, the income from such property so received by the said spouse shall be deemed to be the income of the member who has transferred the property.