Regarding exemption for gifts given by HUF. - Income Tax - 1459/CBDT

INSTRUCTION NO. 1459/CBDT Dated: August 24, 1982 Attention is invited to Board's Circular No. 5-D(G.T.) of 1965 dated 29-10-1965 on the above subject. The Board have examined afresh the question as to whether exemption under section 5(1)(viii) of the Gift-tax Act, 1958, can be allowed in respect of the gifts made by an individual out of the property of Hindu Undivided Family. 2. The Board are advised that if a gift is made by a coparcener as an individual even though out of his property in the HUF, exemption under section 5(1)(viii) is allowable if other conditions are fulfilled. Gift-tax assessment in such a case would have to be made on the donor in the status of an individual. In this connection an extract from the Law Ministry's advice dated 22-5-1976 is enclosed for information and guidance. 3. The exemption would, however, not be available if the gift has been made by the karta acting on behalf of a Hindu Undivided Family because the concept of such a family having a spouse does not prevail. 4. Whether a particular case falls in paragraph 2 or 3 above will depend upon the facts and circumstances of the case. The Gift-tax Officer should, therefore, consider all the facts and circumstances of the case and give a clear finding as to whether the husband has made the gift as an individual or in his capacity as the Karta acting on behalf of the Hindu Undivided Family. 5. Board's Circular No. 5-D(G. T) of 1965, dated 29-10-1965 stands modified accordingly. 6. This Instruction may please be brought to the notice of the officers working in your charge.