HUF deed

- Yes your son can contribute his land into HUF property/corpus.

- I may assist you in creation of HUF deed.

Dear Sir,

Hope you are doing well !!

Yes, it is possible to to include his land into your HUF corpus.

We may assist you in HUF deed format through mail/call.

First you can include your agricultural property as well as your sons property in HUF.

Creation of HUF would bring down your tax liability and secondly your son needs to provide his property as gift to HUF and you will have to incurr cost of gift deed. However it wont attract any capital gain tax as for HUF member are relative.

If you need any further assistance in creation of HUF deed feel free to contact me.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Hi

- HUF will be taxable at slab rate as individual and agriculture income will be included for rate purpose only.

- Individual property will be included in the form of corpus only and used for business activity only. 

- Share of profit from HUF will be exempt in the hands of members.

Thanks

1.) Yes having agriculture income surely increases tax outgo.Lets analyze your issue. 

Your issue : You want to club agriculture property & show income from it in hands of HUF to structure your source of Income.

Issue  : HUF can have income from property which is in name of HUF( corpus of HUF) since property is in your name so diverting income in name of HUF can attract clubbing provision. ( You need to dump property in name of HUF to show it as agriculture income of HUF) same is case with your son's property.

Solution : Transfer property in name of HUF. ( Their will be no implication in Income tax just you need to bear registry charges.)

Many of the CA's advice client to directly club income in HUF without transferring property in HUF's name. It will involve litigation at future stage.

In future, it will be better if you purchase such property directly in name of HUF.

Hello,

Yes, your son can include his land into your HUF corpus.

Agricultural income would be included for rate purpose. The income tax slab for HUF is same as that of an individual, with an exemption limit of Rs 2.5 lakh and qualifies for all the tax benefits under Section 80C, 80D, 80G, etc. Therefore HUF's corpus can be used for investment in tax-free money instruments or investments on which deduction is allowed.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Following are the benefits of HUF creation:

1. It is taxed at the same rates as an individual.

2.Deductions under section 80 and other exemptions can be claimed by the HUF in its income tax return.

3.Investments can be made from HUF’s income. Any returns from these investments are taxable in the hands of the HUF.

4. HUF can pay a salary to its members if they contribute to its functioning of the HUF. This salary expense can be deducted from the income of HUF.

5.An HUF is also entitled to claim a separate tax deduction in respect of payment of Health Insurance Premium.  This deduction is permissible under section 80D of the Income-tax Act, 1961. 

6.Any sum paid out of the income of HUF to its member is exempt. Income may be of current year or earlier years. If you can show that the amount distributed to its member is out of income of HUF that is sufficient to claim exemption u/s 10(2)

ETC.