As per section 10(2) of the Income Tax Act 1961 subject to section 64, any sum received by a member of a HUF, where such sum is paid out of income of the family or in case of any impartible estate, where such sum has been paid out of the income of the estate belongings to the family shall be exempt from tax. It will be taxable in hands of HUF.

2) HUF might have business income, capital gain, income from house property or other sources. It has an option to either reinvest such income or distribute amongst its members. Members must not receive beyond their stake in the HUF as a whole.At the time of such distribution person should be the member of the HUF which will save him from taxes. Such apportionment of income will not be then taxable in hands of the recipient.


3) The share of each coparcener in an HUF is usually equal, but this can be changed with the consent of all coparceners.

Gifts permitted by HUF to its members satisfying to the conditions of Section 10(2) are exempt from Income Tax in the hands of recipients.

The remuneration paid by the HUF to the karta or any member is deductible if it meets certain criteria, like genuineness, reasonability, and is paid under a valid agreement.

If the karta does not have a high income, the HUF can pay him a salary for his services.

A member of the HUF is treated as relative of the HUF hence there is no tax implication at the time of the receipt of the money for HUF. 

It can be treated as a gift if the money is not intended to be repaid. As per Section 56(2), any gift received from specified relatives is tax-free in the hands of the recipient. A member of the HUF is treated as a relative of the HUF; hence, there is no tax implication when receiving money from the HUF.

The karta is generally entitled to operate the bank transactions for an HUF. But check the deed executed or agreement prepared on stamp paper while setting up the HUF to know the exact terms and conditions for handling bank account/s by the karta or member.

Dear Client,

I  want to let you know that, in accordance with Section 10(2) of the Income Tax Act, 1961, any money received by a member of a Hindu Undivided Family (HUF) is completely free from income tax, even if the HUF has already been assessed tax on the income. Thus, no further taxes are due on the amount that the Karta withdraws from the HUF. Therefore, there is no legal requirement for the requisite distribution of calculated income in a ratio between the coparceners when the HUF is still in existence and has not experienced total division under Section 171 of Income Tax Act,1961. Instead, the Act's specific provisions address this scenario. With the support of all co-workers, an equitable distribution of the funds could then be decided upon.Still, these tendencies are typically pertinent to the partition, as the Supreme Court pointed out in N. S. Getti Chettiar Vs. CIT 82 ITR 599.

In fact, as the Karta, you have the power to withdraw funds from the HUF without needing to divide them equally—as long as you do so in a transparent manner and, if required, obtain consent from the other coparceners to ensure the family's well-being. Income tax laws do not forbid withdrawals connected to HUFs during their existence.

Thank you.Hope this answers your query.