Hindu undivided family Archives

HUF – A Perfect Tax Planning Tool Introduction Here is an overview on how a HUF forming can be a perfect tax planning tool. While in business or job, every individual wants to reduce the income tax burden. Various tax-saving schemes like investments are adopted to save tax. Tax evasion is an illegal thing, but proper tax planning is the best way to reduce your income tax. HUF or Hindu Undivided Family is a separate legal entity unique to India. Any family can form a HUF to start a business regardless of the type of product and services. HUF is the best form against Proprietorship and Pvt ltd companies as far as income tax is concerned. Any HUF is governed by the Karta who is the head of the family. HUF can have a separate PAN card separately from the members. So, forming HUF will let you have additional PAN in your family. How HUF (Hindu Undivided Family) Formation Helps in Saving Tax Any Indian family can form a HUF. HUF pays tax and file returns independent from the members. A new separate PAN card is allotted to the HUF. So, here are the main points how HUF is a great tax planning tool. A person can file two IT returns. One as a person and the second as HUF. The taxable income gets divided between the two entities i.e an individual and a Hindu Undivided Family. Thus, the taxable income is reduced significantly due to double deductions. Currently, the income tax slab for HUF for the minimum taxable income is Rs. 2.50 lakhs. So, an individual will be able to claim total Rs. 5 lakhs as an exempted income. Rs. 2.50 lakhs as an individual and Rs. 2.50 lakhs in the name of HUF. Other tax exemptions provided under the section 80 of the income tax act are also available to a person in two ways. All the tax benefits of section n80CCA, 80CCB, 80DD, 80D, and others are applied to the Karta as an individual and also as an HUF member. Tax benefits are also available to the HUF under sections 54 and 54F pertaining to the capital gains. Properties gifted to the HUF do not attract inheritance tax. As per income tax, if any asset is received as a gift, the income earned from it will be treated as HUF income. Moreover, any investment or any insurance which is taken by the HUF comes under tax deduction system. Which HUF Incomes Are Exempted From Tax Further, the following list of the incomes will show you how HUF formation is a powerful way of saving tax. If a HUF member transfers his own property in the name of HUF, income earned from this property is not taxable. “Stridhan” is not considered property of HUF, but solely of a woman. Hence any income earned from Stridhan is not taxable as HUF income. If a daughter has vested property in the HUF, the income earned from this property is not taxable. All these incomes earned by HUF are not taxable as income of HUF. Thus, there are multiple ways in which HUF gets tax exemptions. We at ebizfiling help you for Hindu undivided family creation, HUF Deed Creation, HUF creation procedure, HUF creation services, HUF Formation services. Evaluate HUF Packages.

Hindu undivided family

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