She voluntarily wishes to contribute the rental income directly to my HUF to enhance its corpus. Will it make any difference if if she transfers the house to the HUF instead of the rental income? Therefore, the rental income shall remain taxable in the hand of your daughter in law. Since members including the daughter–in-law are specified relatives of the HUF, the HUF will not have any tax liability in respect of the rental income so received. However the income earned on reinvestment of the rental income will be taxed in the hands of the HUF and not daughter as the clubbing provisions apply to the income on the asset transferred and not on income on income from the asset transferred.

Source: Mint July 04, 2021 04:52 UTC