Interest free loan to HUF

Income Tax
11

Hey @Sumit_Lehri

Let me answer your queries one by one:-

  1. In your case, you’re transferring funds to your father’s HUF and brother’s HUF, not your own - hence, clubbing provisions will not apply. It is important to execute a simple interest free loan agreement made on stamp paper to be legally valid and enforceable.
  2. Yes, HUF can carry out trading in shares and declare income under PGBP, especially for frequent intra-day, F&O, and short-term trading. You can also refer the thread on Can I report capital gains as business income in my ITR?

Hope this helps!

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