how to save tax through Hindu Undivided Family

 

Ø What Is HUF ?

Hindu Undivided Family (HUF Separate Legal Entity with Separate PAN)

Karta                    - Elder Male Member of Family Who Manage Everything

Co- Parceners - Member of HUF can Demand Partition

Member              - Only Member

Drawback of HUF

All the assets in the name of HUF are assets of the family so all family member have a right in the assets of HUF.
Need to file 2 Times ITR.

Ø How to form HUF ?

Create a HUF Deed on Stamp Paper Notarized
Apply for PAN

Opening a New Bank Account

Benefit of HUF

1.       HUF has separate PAN

2.       HUF is equivalent to Individual

3.       Tax Exemption benefits

4.       Tax Deductions U/s 80C

Capital of HUF

HUF – Accept Gift from 50K

Loan - can accept loan from member

Property – HUF can own Property   

- Rental Income  

- Interest Income

HUF can Invest

-          Business

-          Share market and Mutual Funds

-          FD

-          HUF can Hold Movable and Immovable Property

-          Other Sources

HUF can earn from all Head of Income except Salary

Earning Calculation

4 Family Member – Husband Wife and 2 Children

Husband Income – 12 Lakh

Wife Income – 8 Lakh

 Income from house Property – 5.25 Lakh

Now How Taxation Will be applicable

Source of Income	Individual`s  Return	HUF`s Return
		Income after formation of HUF			Income of HUF
Salary	20,00,000	20,00,000
Income From House Property	5,25,000	-			5,25,000
Total Taxable Income	25,25,000	20,00,000			5,25,000
Less:- Section 80C	1,50,000	1,50,000			1,50,000
Net Income	23,75,000	18,50,000			3,75,000
Tax Payable	5,53,625	3,91,400			7,725

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