If any member of HUF made gift of Listed equity share to HUF then under which section this transaction is covered and whether or not this transaction is liable for tax.

and also if HUF sell this share in market then whether the amount will be clubbed in the hands of the member.

Posted 1 year, 4 months ago by CA Tanay Jindal

under section 56(2), if any person receives any property or sum of money without consideration or for inadequate consideration, then whole of such money or value of property is chargeable to tax under the head 'Income from Other Source', if such inadequacy exceeds Rs 50,000/-

Property includes 'Shares'

But, this provision is not applicable if gift is made to relative. HUF and its members are relative u/s 56, So, it will not be taxable.

Under Section 64(2), if any member of HUF transfers his property to HUF without consideration or for inadequate consideration then income from such property will be taxed in the hands of transferor only i.e. it will be clubbed with income of transferor.

U/s 10(34) dividend  received from Domestic companies are exempt, as Domestic Company are required to pay Dividend Distribution Tax u/s 115-O.

U/s 10(36) Long term Capital gain on transfer of listed equited shares is exempt.

Listed Equity Shares are Long Term Capital Asset if they are held for 12 mpnths or more from date of acquisition.

Date of acquisition is the date on which contract note was executed.

Posted 1 year, 3 months ago by Ankit Sharma

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