# Need help on HUF taxation and funding
**URL:** https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599
**Category:** Taxation
**Created:** [June 25, 2024, 12:25pm UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599 "2024-06-25T12:25:46Z")
**Posts on this page:** 11
**Page:** 1
### Author:  [@dhroovsharma](https://tradingqna.com/u/dhroovsharma)
#### Post date: [June 25, 2024, 12:25pm UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/1 "2024-06-25T12:25:46Z")
Hi all,
I need your help with the below query.
I have a HUF. I am Karta of HUF. My wife is a member of HUF and I have 1 child as coparcener.
I am confused on funding the HUF.
As per the rule, if I (Karta) transfer the money (10 lakh) to HUF, and through that money, if HUF generates income, then that income is clubbed with me.
I also understand that if I give a loan to HUF with an interest rate, then the HUF income will not be clubbed with me.
Can member or coparcener transfer money to HUF? and whether the income from that money will be clubbed to a member or coparcener?
I need to understand who can give money to HUF that is not taxable for the sender.
I need to know what the other ways are to receive the money in HUF without clubbing.
Thank you!
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### Author:  [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [June 25, 2024, 7:52pm UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/2 "2024-06-25T19:52:53Z")
Hi @dhroovsharma,
We have covered the clubbing provisions for HUF in detail here and it can help you:
> [@Ask me anything about HUF and its taxation](https://tradingqna.com/t/ask-me-anything-about-huf-and-its-taxation/158385/11):
>
> Hey @tallerballer, @anilsaxena @paekut, Addressing all the queries related to clubbing: The following conclusions can be drawn from the provisions of clubbing and gifts according to the Income Tax Act. An HUF can build a corpus at the time of incorporation. Any capital raised and contributed at the time of incorporation is treated as HUF’s capital and clubbing provisions shall not apply. After the HUF is formed, the members can pool capital in the HUF and transfer capital as a gift. Gift…
If you have any further queries, please let us know.
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### Author:  [@dhroovsharma](https://tradingqna.com/u/dhroovsharma)
#### Post date: [June 26, 2024, 2:37am UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/3 "2024-06-26T02:37:15Z")
Following query on the 2nd point.
Is there any limit for the HUF member to transfer the capital to HUF account to avoid taxation?
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### Author:  [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [June 27, 2024, 6:59pm UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/4 "2024-06-27T18:59:14Z")
Hey @dhroovsharma,
Gifts from members are exempted in the hands of HUF and there’s no such limit on the amount.
Hope this helps!
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### Author:  [@Sudarshan\_Prasad1](https://tradingqna.com/u/Sudarshan_Prasad1)
#### Post date: [September 3, 2024, 3:15am UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/5 "2024-09-03T03:15:35Z")
Hi @Quicko
I have a wife and 2 adult children in my family. I am salaried in 30% bracket. Have no rental income. I want to create an HUF by moving my entire equity portfolio (shares) as a seed capital to HUF (by transfering shares from my demat to newly created HUF demat) and the capital gains/dividends from the shares will not attract clubbing provisions. Please confirm.
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### Author:  [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [September 3, 2024, 5:54pm UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/6 "2024-09-03T17:54:21Z")
Hi @Sudarshan_Prasad1,
Transferring any personal property (movable or immovable) which includes shares, to the HUF does attract the clubbing provisions. In the case specified by you, the income from the transferred shares will be clubbed in your hands.
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### Author:  [@Sudarshan\_Prasad1](https://tradingqna.com/u/Sudarshan_Prasad1)
#### Post date: [September 5, 2024, 9:47am UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/7 "2024-09-05T09:47:46Z")
Hi @Quicko
What if the personal property (shares) is moved to the HUF at the time of HUF inception as the initial corpus? Will the clubbing provision still apply?
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### Author:  [@Tech\_Beam](https://tradingqna.com/u/Tech_Beam)
#### Post date: [October 21, 2025, 8:42am UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/8 "2025-10-21T08:42:42Z")
Hi @Sudarshan_Prasad1 @Quicko ,
This is a very valid point in regards to the corpus at incorporation of HUF. If anyone has a definitive answer or any circular/tax guideline please share. It will be very helpful. Thanks !
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### Author:  [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [November 20, 2025, 1:46pm UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/10 "2025-11-20T13:46:12Z")
Yes, you can use your personal funds to make payments for a property that will be an asset of your father’s Hindu Undivided Family (HUF). @bharat1080
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### Author:  [@hiren\_parekh](https://tradingqna.com/u/hiren_parekh)
#### Post date: [February 25, 2026, 5:46am UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/12 "2026-02-25T05:46:16Z")
@Quicko
I opened my **HUF last year**. The **only members are me (Karta) and my wife**.
My **father is NOT a member of the HUF**.
If my father transfers **₹6.5 lakh** to my HUF, and I **declare the full amount as “Income from Other Sources”** in the HUF return and **opt for the New Tax Regime** , **can the HUF legally pay zero tax** (assuming the HUF has no other income)?
Looking for confirmation on whether this treatment is correct and compliant.
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### Author:  [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [February 26, 2026, 6:06am UTC](https://tradingqna.com/t/need-help-on-huf-taxation-and-funding/168599/13 "2026-02-26T06:06:27Z")
If the total income of a HUF amounts to Rs. 6.5 Lakhs (assuming no other sources of income), there will still be a tax liability, as the rebate of Rs. 12 Lakhs is not applicable to HUF.
Hope, this helps!