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Can a Karta Give Interest-Free Loan to HUF with Repayment Intention?

T S Khurana

T S Khurana   |241 Answers  |Ask -

Tax Expert - Answered on Nov 08, 2024

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more
PRAVEEN Question by PRAVEEN on Nov 06, 2024Hindi
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Sir, can karta give interest free loan to his huf with an intention of repayment?

Ans: Yes. Karta or any other member of the HUF may give Interest Free Loan to HUF, which is repaid after some time. However, both transactions should be through banking channels.
Most welcome for any further clarifications. Thanks.
Asked on - Nov 09, 2024 | Answered on Nov 12, 2024
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Ok thank you very much sir for valuable information. I will arrange repayment in monthly installments and i hope repayment amount is not taxable again in karta hand as it doesnt contain interest part.
Ans: Your opinion is right sir. Repayment of loan amount is not income & hence not taxable.
Most welcome for any further clarifications. Thanks.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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