CA Intermediate · Taxation · Income of Other Persons included in Total Income of Assessee

Ravi has an old HUF and a self-acquired house. In tax year 2026-27 he converted the house into the HUF's property by throwing it into the common stock without consideration. Net income from the house in that year is Rs 2,10,000. Ravi's other income is Rs 8,00,000. How is the Rs 2,10,000 taxed?

The Rs 2,10,000 is clubbed in Ravi's total income. When a member converts his individual property into HUF property by throwing it into the common stock without adequate consideration, the income from it continues to be taxed in his hands, not in the HUF's.

ATaxed in the HUF's hands only
BClubbed in Ravi's total incomeCorrect
CSplit between Ravi and the HUF equally
DExempt from tax

Explanation

When a member converts his individual property into HUF property by throwing it into the common stock, the income from the converted property is clubbed with the individual's income, as long as he remains a member and the property or its accretion is held. Thus the Rs 2,10,000 is included in Ravi's total income, not the HUF's.

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