Re: Amount Recieved by the Member from HUF.

An amount recieved by individual from its HUF is Taxable under section 56(2)(x) if IT Act, 1961

A member of the 'HUF' has a pre-existing right in the family properties. A Coparcener has a pre-existing right and interest in the property and can demand partition also, however, the other members of the 'HUF' have right to be maintained out of the 'HUF' property. On division, the share in the estate/capital of the 'HUF' cannot be treated as income of the recipient,rather, the same will be a capital receipt in his hands. Accordingly the amount received by the assessee from the 'HUF', being its member, it is a capital receipt in his hands and is not exigible to tax.     In  Pankil Garg v. PCIT (2019) 178 ITD 282 (Chd.)(Trib.),www.itatonline.org the Tribunal held that the amount received as gift from 'HUF', being its member, is a capital receipt not liable to tax . 

 

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