This might sound to be impracticable in real life, but it is not so, as this is made possible in actual practice by proper tax planning. You can make a tax planning through HUF, but before explaining it, let’s shed light on some important part of HUF law.
– Only Hindu, Jains, Sikhs and Buddhists are considered as Hindus and they can create HUF not Muslims or Christians.
– A HUF is a fluctuating body, its size increases with birth of a member in the family and decreases on death of a member of the family
From Income tax perspective HUF is considered as a separate entity therefore taxed separately. Income tax slab is same as that of an individual i.e. 2.5 Lakh.
HUF is qualified for all tax benefits under section 80C (deduction upto 1.5 Lakh), 80D (Deduction for mediclaim) 80G (Deduction in respect of donation).
Further you can also take exemptions under the capital gains by selling residential house under section 54/54F.
Legal requirement to create HUF- A HUF is created through executing a deed, getting HUF PAN and opening a bank A/c in the name of HUF.
Keep reading! And reach out to us if you have any queries and you are looking for an CA in Gurgaon, Faridabad, Delhi for further clarification.
