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October 26, 2021
Table of Content
BENEFITS OF HINDU UNDIVIDED FAMILY
HUF has to be created keeping in mind the legal and financial requirements. A HUF is created through executing a deed, getting HUF PAN and opening a bank A/c in the name of HUF. HUF is basically treating your family as a separate unit. The advantage of a HUF is that as it has a separate PAN card it can also file tax returns separately. Let us have a look on some more benefits as mentioned below:
- Income tax benefits
A HUF being a separate legal entity in the eyes of law, both the individual and the HUF have separate PAN Cards. So the basic tax exemption available to the individual of Rs. 2.5 lacs will also be available to the HUF. Thus, in addition to the basic tax exemption enjoyed by an individual, one can avail an additional exemption.
- Owning a house
If an individual owns more than one self-occupied property, only one of them can be claimed as a self-occupied property. The rest are ‘deemed to be let out’ and one has to pay tax on notional rent. However, a HUF can own a residential house without having to pay tax.
- Life Insurance
A HUF can pay Life Insurance premium for individual members, and claim tax benefits under Section 80C. The maximum amount that can be claimed as a deduction under this section is Rs 1.5 lakh.
- Investments
A HUF is allowed to make investments in tax-saving Fixed Deposits and Equity Linked Savings Scheme (ELSS) to earn tax benefits of up to Rs.1.5 lakh under Section 80C. And while a HUF cannot open a Public Provident Fund (PPF) in its name, it can claim tax deductions for the amount deposited by the HUF in respective PPF accounts of its members.
- Health Insurance
Without HUF, one can claim a deduction of Rs.25,000/- per year on premiums paid for Health Insurance for your family under Section 80D. However, this limit can be insufficient when you want to provide decent health coverage for your family. While with HUF, one can claim additional tax benefit of up to Rs 25,000 on Health Insurance premiums paid during the year for family members of the HUF. If the person is a senior citizen, the limit goes up to Rs.50,000/-.
POSITION OF MARRIED DAUGHTER
Unmarried daughters would always be a Co-Parcener and have equal rights over the property just like a Son. Although, the Status of Married Daughters would be as follows:
In Her Father’s Property: She will remain a Co-Parcener even after the marriage.
In her In-Laws House: She will always be a Member but Not the Co-Parcener. Although, Husband can give his co-parcenary right to her wife.
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