Gift To Minor Daughters Out Of HUF Property Prior To Marriage

 

On the issue whether the Karta can gift the HUF property to minor daughters only on the occasion or marriage or at any time, it was held that, the Karta of a HUF has inherent powers to make gifts out of HUF property in reasonable quantity. The support for this proposition is derived from the Apex Court case of CWT vs K.N. Shanmugasundaram, (1997) 11 SCC 252, wherein the Apex Court referred to the following finding of the Madras High Court at Page 255:


Under the Hindu law the father or his representative can make a valid gift by way of reasonable provision for the maintenance of the daughters, regard being had to the financial and other relevant circumstances of the family, and by custom or convenience such gifts are made at the time of marriage but the right of the father or his representative to make such a gift is not confined to the marriage occasion and it is a moral obligation which continues to subsist till it is discharged. Marriage is only a customary occasion for such a gift but the obligation can be discharged at any time either during the lifetime of the father or thereafter. The High Court has further held that the right of the father or his representative to make such a gift is not confined to the marriage occasion and that there was no reason why a father should not have the power to make a gift of a reasonable portion of the joint family property to his minor unmarried daughters who might get married or continue to remain as spinsters and lead a life of celibacy. According to the High Court, the need of a father in a Hindu undivided family to make a provision for the future maintenance of his minor unmarried daughters is greater and more compelling than the one he may have to make a provision for the maintenance of the daughter at the time of the marriage or thereafter. For a daughter who gets married or who has already got married, has her husband who may provide for her maintenance in addition to the support which she derives from her father after the marriage while there is no such support from a person like the husband or other relative in the case of a minor unmarried daughter of a Hindu father of an undivided family. The High Court further found that having regard to the fact that the total assets of the assessee amounted to Rs 13 lakhs and that the gift which each of the three minor daughters got would bear only 1/39 portion of the total value of the assets of the assessee on one computation and only 1/55 portion of. the total value of the assets by another computation it could not be said that the properties gifted to the minor daughters do not bear a small or reasonable proportion of the total value of the properties owned by the family of which the assessee is the manager. In view of the aforesaid findings, the High Court has answered the questions referred to it against the Revenue and in favour of the assessee.


After this the Hon’ble Apex Court declined to interfere on the ground that the Gift of property in small proportion to three minor daughters from HUF property was approved under the Income-tax as well as Gift tax Assessment.


Thus, it can be concluded that the Karta can gift in reasonable quantity to the members of the HUF.

MORE TOPICS ....

HUF -  Capital Gain Account
HUF -  Deduction from HUF Business Income
Income Derived From Funds Of HUF -Whether Individual Income Or Family Income
Gift by HUF to its Member
Gift To Minor Daughters Out Of HUF Property Prior To Marriage
Gift of HUF Property to Stranger or to any Person who is a Alien to HUF
Clubbing Provisions In Case Of Gifts Received By HUF
Applicability of Clubbing Provisions in case Karta of a HUF is a Partner in a Firm
Gifts received by HUF from Aliens / Strangers
HUF - Investment Options
Concept of Multiple HUF’s
Whether a Single Member can Constitute a HUF ?
Whether any Limit is placed on Number of Members of a HUF ?
Whether HUF- Can Be Constituted with only Female Members ?
Drawings / Expenses of HUF
Whether HUF can be a Shareholder / Subscriber to the MOA ( Memorandum Of Association)  of a Company
Whether HUF can be a Member of a Cooperative Society ?
Whether HUF can be a Partner ?
Can KARTA of a HUF enter into Partnership with another Member of HUF ?
Can There Be A Partnership Between Two HUFs?
Effect Of Death Of Karta In Case Of Partnership Firm
Whether HUF Can Be A Proprietor ?
Whether HUF Can Be A Trustee / Settler ?
HUF - Aliyasantana Law
HUF - Marumakkattayam Law
Power of KARTA in relation to HUF
Managing Members in relation to HUF
Whether a Female can become a Karta ?
Tax Planning TIPS for HUF
HUF - Meaning Of Important Term- “Ancestral”
HUF - Meaning Of Important Term- “Stridhan”
HUF - Meaning Of Important Term- “Mitakshara”
HUF - Meaning Of Important Term- “ Dayabhaga”
Meaning of the term ‘Coparcener’ of HUF
Power of ‘Coparcener’ of HUF
Difference between a ‘Coparcener’ and a ‘Member’
Whether Husband / Wife Can Constitute A HUF ?
HUF - RECOVERY PROVISIONS
‘Maintenance of Accounts’ by HUF
‘Audit of Accounts’ by HUF
Applicability Of The ‘Accounting Standards’ On HUF
Whether Merger Of Two HUF is Possible ?
Residential Status of the HUF under I.T. Act.1956
‘Coparcener Property’ under HUF
 
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