Hi Sir. We recently created an HUF account < 2 private employee adults + 2 kids >
Could you kindly guide how to get capital for HUF bank account, as salary is the only source of income to us.
Which bank is suggested to have an HUF account, as the mobile number which we already have, may not be allowed to used for HUF bank account, as I believe 2 UPIs are not possible.
Where to invest? And how to invest? For maximum wealth creation.
If we do trading through HUF Dmat account, are we supposed to pay any STCG, if the income is below 2.5 L per annum.
Is IT filing every year mandatory, even if theres no income or income which is exempted from taxes like 2.5 L/ annum.
Same mobile no. can be used for HUF bank accounts. I opened my HUF bank account with Equitas Small Finance Bank using the same mobile number as in my individual bank account with Equitas bank.
How to invest - for mutual funds, I filled the CAN registration forms by MFU and got it successfully opened in a week. For demat/trading - I went with Dhan. They require a different mobile number if you already have an account with them.
My wife inherited joint bank account of 25 lakh after her mother demise. She put that money in Fd now itâs around 30 lakh. She paid taxes on the FD and was not aware of HUF concept . Can we open HUF now ?and for how much money? and what proof we would need to income tax department that money should not be clubbed .
I am aware that a karta can give a loan to HUF and the earnings from the same do not attract clubbing provisions.
Can the same principle be used to provide equity shares held by Karta as a loan to HUF? The intention is for HUF to use the shares as collateral for generating trading income.
If you want to use shares as a collateral then you need to have their ownership. Also, shares cannot be given as loan to another entity.
Thus, HUF can use the shares as a collateral when it has the ownership of the same and if you transfer the ownership it will attract the provisions of clubbing of income. Any income generated by using these shares will also be clubbed with the income of the Karta.
If you gift these bonds to your HUF, the gift amount will be exempt.
However, the interest income received from these bonds in the future will be clubbed with the income of the members who gifted the shares.
Usually transfer of shares will include consideration in exchange of the shares but if there is no or insufficient consideration then it will be a gift.
So @ramesh1985, some of the ways using which the HUF can build its corpus are:
Ancestral Property: Any assets or wealth inherited from the larger HUF are a part of its corpus. e.g. A father transferred his HUFâs property to his sonâs HUF.
Gifts from Non Relative: Any gift received from non relative will be taxable. However, income upto âš3 lakhs will be tax free for FY 2024-25.
Loan: Karta or any member of the HUF can give loans to the HUF at a market rate and through that manner HUF can build corpus.
If an individual receives Shares, Mutual Funds and property from inheritance. Then those are sold in the market and taxes are paid accordingly on the individualâs personal PAN.
So, can the money generated from the sale of these Shares, Mutual Funds and property, be transferred to a HUF to fund the HUF ?
I have a HUF Account in which main source of income was Investment in shares and interest. I wanted to close HUF account, so I transferred shares of value of Rs 30,000 approx to Karta through Off Market and closed the bank and demat account in October 2021. But didnât filed my returns for that Assessment year 22-23. I didnât dissolve the HUF as one tax appeal of AY 13-14 is pending and it is still going on. But no transactions was done in HUF after October 2021, so I didnât filed any return since then. But now I have received message from Income Tax department to file my return for AY 2022-2023 as on off market transaction was there.
So kindly if you can reply how to treat that off market transfer of shares in Karta Account.
For this transfer of shares from the HUF to the karta, the tax treatment depends on whether it was a gift or a sale.
If it was transferred without consideration, it qualifies as a gift and is exempt under Section 56(2)(x) , with the Karta inheriting the original cost and holding period.
If consideration was received by the HUF then it is treated as a sale , and capital gains tax applies. Such transactions may be reflected in your AIS and thus is it recommended to file your ITR. If you did not file it, you can still file an updated return (ITR-U) for AY 2022-23.