TaxTMI 
TaxTMI 
What is the status of gift from HUF to any of its member in light of judgment Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot), whether it is exempt or not.
Income Tax on Gift from HUF to member
23 Feb 2012 
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Tax treatment of gifts from an HUF to a member depends on whether the HUF qualifies as "relatives" for exemption.
Tax treatment of a gift from an HUF to a member depends on whether the HUF is treated as a group of relatives under the Explanation to section 56(2)(vi). Following ITAT Rajkot, gifts from an HUF to a member can be exempt as gifts from "relatives." However, the position is debatable and may be contested by revenue; practitioners therefore advise avoiding gratuitous transfers, or documenting transfers for specific purposes with consent of co-parceners and retention of the donee's membership. (AI Summary)
Tax treatment of a gift from an HUF to a member depends on whether the HUF is treated as a group of relatives under the Explanation to section 56(2)(vi). Following ITAT Rajkot, gifts from an HUF to a member can be exempt as gifts from "relatives." However, the position is debatable and may be contested by revenue; practitioners therefore advise avoiding gratuitous transfers, or documenting transfers for specific purposes with consent of co-parceners and retention of the donee's membership. (AI Summary)