insurance premium for or on the life of any member of the huf a maximum deduction of rs 150 lakh from gross taxable income is possible under this section funding an huf and income tax implications the typical methods of transferring assets to an huf are by way of gift or under a will when a gift is made for no or inadequate consideration it implications can arise in the hands of the recipient huf except in a case where it is from a member to the huf however transfer of assets from a member to the huf can result in clubbing of future income in his hands explains pranav sayta family business leader at ey gift tax no longer exists as a separate act however provisions relating to it are contained in section 562x of the income tax actcash gifts in excess of rs 50000 or the value of movable and immovable property above this sum during a financial year are taxable in the hands of the recipient as income from other sources however this section exempts any assets be it cash shares property received under a will points out sayta under a will the property will pass to the huf only on demise of the original owner thus while this mode mitigates it litigation it isnt always practicalrajesh had wrongly thought that the cash he received at his marriage reception could be passed on by him to the huf without any it consequences for the huf and for himgifts received on the occasion of marriage of an individual are not taxed under section 562x the objective is to provide an exclusion to the individual getting married and not to his huf points out choudhary thus gifts in cash or in kind received by rajesh on his marriage will not attract it in his hands however if rajesh wants to fund his huf with cash from friends and family they should make the gift direct to the hufup to certain monetary limits there would be no it implication for the huf if the cash gifts exceeds rs 50000 the entire amount could be taxable in the hands of the huf however a huf can safely receive gifts up to rs 25 lakh a year which is the basic it exemption limit provided the huf doesnt have any other income during that year if the huf intends to invest and take advantage of section 80c this limit can be higher the cash gifts of the huf can be in vested by it say in fixed deposits interest if any would then accrue to the huf and would not be clubbed with rajeshs incomeharish cautions an huf comes into existence upon marriage and therefore if a gift is made after the marriage and is specifically stated to be to the huf then it can be treated as huf property if however a gift is made a little before the marriage or at the time of marriage the burden of proof will