Who can contribute Seed Capital to HUF?

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  1. S S Bhatia

    S S Bhatia New Member

    I am a retired banker. I want to know who can contribute the seed capital of HUF entity.
    Secondly can members of HUF contribute capital if not can they give loan to HUF for the business requirements of HUF?

    S S Bhatia
     
  2. Amit Sahni

    Amit Sahni Active Member

    HUF is created when the assets belong to the whole family.

    This usually happens in case of gift by ancestors. Therefore, ideally the seed capital should be contributed by the parents/ parents-in-law of the Karta
     
  3. Amit Sahni

    Amit Sahni Active Member

    And yes, the members of the HUF can give loan to the HUF for business requirement of the HUF
     
  4. S S Bhatia

    S S Bhatia New Member

     
  5. S S Bhatia

    S S Bhatia New Member

    In case parents/in law are not alive ,the brother in law can make a gift.Will that be in order. How much amount can be tax free gift?
     
  6. S S Bhatia

    S S Bhatia New Member

    What can be the reasonable rate of interest payable by HUF TO the members contributing. Can it be the bank's saving rate supposing the member contribute from it's saving Account.?
     
  7. S S Bhatia

    S S Bhatia New Member

    I must thank for the prompt reply.
    Regards
     
  8. Amit Sahni

    Amit Sahni Active Member

    If the parents are not alive, then the brother in law can make the gift which would be considered as seed capital for the HUF.

    Yes, you can consider the Rate of Interest for Loan same as the Interest Rate on Savings Account
     
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