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 difference between individual and HUF in income tax?
26 November 2008 Individual is person who holds self acquired property and having right in ancestral property. HUF is the sum of all ancestral property that you acquire by virtue of being born in that family.
What is Hindu undivided family example?
Hindu Undivided Family (HUF) consists of all persons directly descended from a common ancestor, and also the wives and daughters of the male descendants. For instance, you and your spouse along with your two children can create an HUF and get certain relaxation in computation of taxes.
What is the benefit of HUF?
The income tax slab for HUF is same as that of an individual, with an exemption limit of Rs 2.5 lakh and qualifies for all the tax benefits under Section 80C, 80D, 80G and so on. It also enjoys exemptions under Section 54 and 54F with respect to capital gains.
Who is eligible for HUF?
One person cannot form HUF, it can only be formed by a family. A HUF is automatically created at the time of marriage. HUF consists of a common ancestor and all of his lineal descendants, including their wives and unmarried daughters. Hindus, Buddhists, Jains and Sikhs can form HUFs.
Can a husband and wife form HUF?
It consists exclusively of male members, much narrower than Hindu Undivided Family. … 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.
Can HUF claim LIC deduction?
Apart from several other items provided under section 80C, a taxpayer, being an individual or a Hindu Undivided Family (HUF), can claim deduction under section 80C in respect of premium on life insurance policy paid by him/it during the year.
Can HUF earn professional income?
Hello, Even if you create a HUF, professional income, and the rental income would be taxable in your individuals’ name only. And also a HUF cannot have salary income. Since professional income would depend upon your personal skills & abilities and the rental income would be charged in individuals hands as per sec.
What income can be shown in HUF?
The entity is allowed to earn from all legitimate ways except by way of salary. It can engage in business, investing in real estate and market linked investment options such as shares, earn income through rent etc. The HUF should file for ITR (Income Tax Returns) and income earned would be taxed as per the slabs.
Can salaried person open HUF?
Can a salaried person open HUF account? Yes. Salaried Individuals can open a HUF account as soon as he is married. However to enjoy the Tax Deductions he should have a child.
What are the disadvantages of HUF?
Disadvantages of the HUF
- No outside members other than family members can be introduced to the HUF. …
- While the Karta has all the power he also has the burden of unlimited liability. …
- Also, the absolute dominance of the Karta overall business and financial decisions make cause conflict among the HUF.
Is GST applicable to HUF?
It also includes supply of goods/ services for starting or closure of a business. … It is likely that services & goods carry a different GST rate. GST applies to all persons. Persons includes – Individuals, HUF, Company, Firm, LLP, AOP, Co-operative society, Society, Trust etc.
Can we buy a car in HUF?
Who is eligible for a car loan? A salaried individual, self-employed whether in business or profession are eligible to apply. One can even apply on the name of the HUF, firm, company, etc. to avail of the depreciation (a deductible expense) benefit, under the Income-tax Act.
Can two brothers form HUF?
An HUF can consist of just two members, one of whom is a coparcener. However, for tax purposes, the income of such an entity would not be taxed in the hands of the HUF; it would be taxed in the hands of the sole coparcener. For an entity to be taxed as an HUF, it should have at least two coparceners.
Can female be Karta of HUF?
Before Hindu Succession (Amendment) Act 2005, it was held by many courts that only a coparcener could become ‘Karta’ of HUF. … As such, it can be safely presumed that female member can now become ‘Karta’ of HUF and such can act as manager of joint family properties in their full rights.
Is married daughter member 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.