Can I take the rental income in my HUF’s name for the properties owned by me?

When you have a commercial property in your individual name but also maintain a Hindu Undivided Family (HUF), it is natural to wonder whether the rental income from that property can be routed through the HUF.

A similar question often arises when the HUF is also receiving commission income. The key issue is not merely where the money is deposited, but who is legally entitled to the income and how the tax laws treat its transfer. Let us examine these questions in detail.

Today's Q&A explains such details in response to a query by a reader.

Moreover, the amount of rent so transferred to HUF will be treated as gifts from Karta to the HUF. Since you are a member of the HUF, the gift so made to the HUF shall not be treated as income of the HUF under Section 92(2) as a member of the HUF you are covered under the category of the specified relatives for this purpose.

As far as commission income is earned it can be included in the HUF income if the business of commission is carried in organised way with a proper business set up. However, if the commission is earned by the efforts of the Karta or any individual member, the same should be included in the income of the HUF. If you do so and if the tax department finds it out, you may be subjected to interest and penalty.