Member contribution to HUF

[CA Rachit Agarwal]

Please clarify whether the contributions made by members to its HUF, is taxable in the hands of HUF. Contibutions of the members is considered under the Capital Account of HUF.

As HUF being the separate legal entity and being assessed separately, and HUF not being the individual.

[B L Bhojwani]

1. In the hands of the HUF, such contributions are covered under clause (v)/(vi)/(vii) of sub-section (2) of section 56.

2. In the hands of the individual, i.e., the member of the HUF making the contribution, clubbing provisions under sub-section (2) of section 64 will be attracted.

[Rama Krishana]

I wish to endorse the view of my learned brother.

AI Summary

Taxability of HUF member contributions: treated as income under gift provisions and subject to clubbing in contributor's hands. Contributions made by members to a Hindu Undivided Family are treated as income of the HUF under the gift related inclusion provisions, and the clubbing provisions operate in the hands of the contributing individual to attribute such transfers back to the transferor for assessment.