Receipts by members from H.U.F:- any sum received by an assessee in his capacity as a member of a H.U.F is exempt from tax to avoid double taxation as H.U.F is also assessable separately on its income in its own capacity. The sum should be received in the capacity as a member of an H.U.F. I the recipient is not a member of the H.U.F., he cannot claim the exemption. The sum should be received either out of the income of the H.U.F or out of the income of imputable estate owned by the H.U.F under section 10(2).
The ownership of impartible estate through belongs to the joint family but the income therefrom belongs solely and absolutely to the holder of the estate. The holder of the estate is assessable as an individual in respect of the estate income. The senior most male member succeeds to the impartible estate by law of primogeniture but the junior male members may have the right to maintenance out of the income from the impartible estate. Hence the exemption has been provided if any sum is received by the member of HUF out of the income from impartible estate.
Position of member in HUF:- only those members of the HUF can claim exemption who can either claim a share of partition or who are entitled to maintenance under Hindu law and thus have an interest in the joint income of the HUF[Kadar narian singh vs. CIT(1938) 6 ITR 157.
Conversion of separate property into HUF property cannot be exempt: - where a member of the HUF coverts his separate property into HUF property after 31 December 1969 without adequate consideration, the income of such property is included in the total income of such member under section 64(2) of income tax act. No exemption can be claimed for such income.