[vc_row][vc_column][vc_column_text]Today we will discuss the very important topics save tax by forming HUF. In this we will discuss when to form the HUF and how effectively we can do the tax planning by forming the HUF. In this we will also sharing you the format of HUF deed
What is an HUF?
A Hindu Undivided Family (HUF) is automatically created at the time of marriage as a separate taxable entity and a new PAN Card is allotted to the HUF. Hindus, Buddhists, Jains and Sikhs can form HUFs. The head of a HUF is called the Karta, he is the senior-most male member of the family.
Basically the logic behind forming an HUF to save tax is to avail the benefit of an extra PAN Card legally
HUF is also required to file Income Tax Return every year just like an Individual claim the Slab benefits
Can we form the HUF after marriage or child is necessary?
All the members of the Karta’s family can be members of the HUF. Son and Daughter both are treated as Coparcener but wife is not treated as coparcener. The difference between the two is that any of the coparceners can demand partition of the HUF
HUF can be formed with just two members one of whom is a coparcener. But for an entity to be taxed as a HUF, it should have at least two coparceners. For instance, if HUF consists of only the husband and wife, then there is only one coparcener. So it will not be taxed in the hands of HUF except in the case where the funds are received on the partition of larger HUF. It will be taxed in the hands of a sole coparcener.
What income is taxable as HUF INCOME?
Resources for the finance of HUF can be brought in only through inheritance or gift (conditional on Income tax laws – an amount exceeding Rs 50,000 from non-family members is taxable). A member cannot converted or transferred as gift or without adequate consideration his self-acquired property into join family property, income from such property is not taxable in hands of the HUF , it will be clubbed into individual only.
Investments can be made from HUF’s income. Any returns from these investments are taxable in the hands of the HUF.
Can HUF do the business?
HUF can do the following business share trading, future and option, trading and manufacturing business service business except consultancy. HUF can also earn the Rental income if any property in his name. Also he can do the transaction in share
Extra Deduction under Section 80C, 80D
Deductions under section 80 and other exemptions can be claimed by the HUF in its income tax return like ELSS Mutual Funds, insurance policy on the life of its members.
How to form the HUF DEED?
Take the stamp paper in the name of Karta. And make a deed.
Format of HUF DEED
AFFIDAVIT FOR HUF
I, __________son of Shri ________ , aged ……….. Years, resident of India and as Karta of my Hindu Undivided Family (HUF) affirm on oath and declare as under:-
- That I am Karta of our HUF which is known as ……………………………………….. (Name of HUF).
- That as on today, name of coparceners (including name of Karta) our above said HUF, their father name and their addresses are as under :-
| S.No. | Name Of Coparceners | Name Of Father | Address |
| 1 | |||
| 2 | |||
| 3 | _______ | ||
- That the above said HUF is in existing since ………………. (Date of birth of first child).
Place: Mumbai
Date: ______________
Deponent
Verification
I, _________ son of Shri __________ hereby verify that as per my best knowledge above mentioned contents of this affidavit are true and correct and nothing was hidden there from.
…………………………….
Deponent
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