Transaction with respect to gift:
By virtue of section 56(2)(vii), the receipt of shares by HUF will not be treated as income from other sources in the hands of HUF. By virtue of section 47(iii), the transcation is not included in the definition of transfer, hence capital gain tax not chargeable in the hands of transferor member.
Transaction with respect to Sale:
Considering cost to previous owner(i.e. member) as referred to in section 49(1) and other provision of capital gain, calculate capital gain. The gain or loss so calculated will be clubbed in the hands of original owner(i.e. member of HUF) by virtue of section 64(2) under the head of capital gain because property is converted as the property of HUF without actual consideration.
However, since the property is Listed Equity Shares, if the capital gain so computed is long term capital gain (consider period of holding of previous owner also: CIT v Manjula J Shah/ CIT v Arun Shoonglu Trust), the same is exempt under section 10(38). This exempt income will be clubbed in the hands of member of HUF and will remain exempt. |
