Hey @sumith,
The residential status of the HUF does not depend on the residential status of its members. It depends on where the HUF is controlled and managed from. In case the HUF is wholly managed from outside of India, only then the HUF is considered a non-resident.
Hope this helps!
Hi @Quicko ,
Iâve read this definition. However, what does âcontrolled and managedâ mean? Isnât the HUF controlled and managed by Karta and members? If the Karta and members are non-residents, doesnât it mean the HUF is controlled and managed by non-residents too?
Canât you transfer the shares directly to the HUF demat account using CDSL transfer? Why sell and transfer and buy again? Can save on charges and unnecessary headaches.
What will happen if a member gifts share to huf and huf sells it in marketâŚWill clubbing provisions applyâŚWill capital gain be attracted in hands of member as there is no income but capital gain.
Other question is can member provide interest free loan to huf for trading
eagerly waiting for reply
Hello @Sumit_Lehri,
Yes, in the case stated by you, when the member gifts shares to HUF and HUF sells the same, clubbing provisions will apply to the capital gains earned. The capital gains will be taxed in the hands of members.
Yes, a member can provide interest interest-free loan to HUF for trading.
Hope this helps!
Hello @sumith,
Controlled and managed means the decisions regarding managing the affairs of the HUF. If the place where the decisions regarding management of HUF are taken is outside India then the HUF will be considered a Non-Resident.
Hope this clarifies!
Thanks for clarificationâŚSo a member can provide interest free loan to huf for trading and what will happen to any interest earned on loan amount in hands of hufâŚHow will that be taxedâŚWill clubbin apply in case of loan as well?
isnât this a way to save tax, a person falling in highest tax bracket ,can transfer funds as interest free loan to huf for trading purposeâŚThis way interest earned via saving account on such interest free loan will get taxable in huf hands and thjis way assesse can save tax which he would have paid if he had shown that interest income in his profile ?
Is there any documentation needed for providing loan from karta or member to HUF , or simply transfer of funds from savings account will do ?
Can a man( married but without any child ) with wife create HUF and avail tax benefits after availing pan and account ?
I have few questions about HUF. @Quicko
I want to open FNO trading and investment account under the name of HUF.
Is there any condition to name HUF ?
Does all the Family members have to file their individual ITR ? (My Mother does not file ITR, Does she have to file ITR if we form HUF or only HUF ITR is required ?)
Individualâs asset will remain seperate ? I do not want to transfer my parents house under HUF.
How to close HUF ? once it is close and all the asset will distribute. Is there any tax liability ? let say there is 1 crore worth of shares under HUF, at the time of closure do we have to sell those shares first and distribution all capital or can we distribute those shares ?
Hey @Private,
You will first have to obtain a PAN for the HUF. You can use this PAN to open a Demat account for the HUF. Moreover, ITR filing for the HUF is necessary, if individuals of the family are not liable to file the ITR, then it is not mandatory for them to file.
You can choose what assets you want to transfer to the HUF.
To close the HUF, all the assets and liabilities must be transferred. However, it is not mandatory to sell shares and then distribute money amongst the members, you can directly transfer the shares off-market amongst the members and close the HUF.
Hope this helps!
How does HUF property gets divided incase thereâs a divorce between husband and wife ?
What about profit sharing or investment distribution?
Can all the members share profit every year ?
Hey @3D1,
The share of each member is mentioned while creating the HUF deed. The partition will happen based on the same.
Hope this helps.
The share of each member is mentioned while creating the HUF deed. The partition will happen based on the same.
I donât think this is true. All the members of HUF have a equal share as per what I have read.
Hey @tarun2,
If there is no mention of the share of each member, then there will be equal partition. However, if it is specifically mentioned in the deed, the partition happens as per that.