Under Hindu Law, an HUF is a family which consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. An HUF cannot be created under a contract, it is created automatically in a Hindu Family.
What is the concept of HUF?
HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. … A Hindu family can come together and form a HUF. Buddhists, Jains, and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independent of its members.
What do you understand by Hindu Undivided Family?
A HUF or Hindu Undivided Family (HUF) consists of all person lineally descended from a common ancestor and includes their wives and unmarried daughters. … The daughter ceases to be a member of her father’s family on marriage and becomes a member of her husband’s family.
What is HUF and its benefits?
By forming a Hindu Undivided Family, you can optimise your tax liabilities and also include your family members to benefit in the future. For the sake of income tax, the HUF is considered as a separate entity and is therefore taxed separately.
Why Hindu Undivided Family is created?
The primary reason behind building a HUF is to get an additional PAN card which would be legally acceptable, as well as to avail the tax benefit. After building the HUF, the members falling under HUF will not have to pay tax individually. … The HUF can then start using the new PAN card to file the ITR.
Can a husband and wife form HUF?
Hindu Undivided Family is different from a Hindu coparcenary. … To create HUF, at least two coparceners are required either son or daughter. Therefore only husband and wife cannot create an HUF, unless the property has been received by a coparcener on partition or otherwise.
Who can gift to HUF?
As per Hindu law, HUF is inclusive of all family members from a common ancestor, hence the limit of 50,000/- does not apply on HUF, excluding cash gift of more than Rs 50,000/-. Gifts permitted by HUF to its members satisfying to the conditions of Section 10(2) are exempt from Income Tax in the hands of recipients.
Are married daughters part of HUF?
Yes, a married daughter is considered a part of HUF. Prior to 2005 amendment in the Hindu Succession Act, 1956, the daughter, on her marriage, ceases to be a member of her father’s HUF and becomes a member of her husband’s HUF. … Thus in event of partition of her Husband’s HUF, she has one share in such property.
What is Hindu undivided family Wikipedia?
A Hindu undivided family or HUF is a legal term related to the Hindu Marriage Act. The female members are also given the right of share to the property in the HUF. … The daughter, on marriage, ceases to be a member of her father’s family and becomes a member of her husband’s family.”
Can Karta gift to HUF?
The money transferred by the Karta of the HUF may either be treated as loan if the same is intended to be repaid or it can be treated as gift if the money is not intended to repaid. … A member of the HUF is treated as relative of the HUF hence there is no tax implication at the time of the receipt of the money for HUF.
What is Section 80C?
Section 80C – Deductions on Investments
The benefit of this deduction can be availed by Individuals and HUFs. Companies, partnership firms, LLPs cannot avail the benefit of this deduction.
What are the sources of income of HUF?
For an HUF, the income sources are almost similar to individual taxpayers such as profits from business or profession, income from house property, capital gains, income from other sources and so on. Since the HUF is a separate entity, it cannot earn income from salary.
Is Reliance a joint Hindu family business?
There are several joint Hindu Family Business examples in India, which include Reliance Industries Limited and Mahindra and Mahindra Limited. … The business is usually overseen by the eldest member of the family or the head, called the Karta.
What is the meaning of company assessee ‘?
An assessee is any individual who is liable to pay taxes to the government against any kind of income earned or any losses incurred by him for a particular assessment year. Each and every person who has been taxed in the previous years for income earned by him is treated as an Assessee under the Income Tax Act, 1961.
Can mother be Karta of HUF?
As your mother would only be a member of the HUF and she would not qualify as a coparcener, she can’t become the karta. … The court held that the Hindu Succession (Amendment) Act, 2005 which placed female coparceners on equal footing with male coparceners also extends to the position in relation to a karta of an HUF.
How do you earn income from HUF?
All income tax deductions are also available to HUF just like they are available to an Individual.
Capital created by HUF through Income earned
- Through any Business.
- Investing in Shares and Mutual Funds,
- Investing in Real Estate.
- Investing in fixed deposits.
- Through Rental Income.
- Various other sources.