Hindu Undivided Family (HUF)

A Hindu Undivided Family (HUF) is a collective family entity created to save on taxes by pooling family assets. This joint family setup treats the HUF as a separate entity from its members. Eligible members include Hindus, Buddhists, Jains, and Sikhs. Under section 115BAC, income tax rates for Hindu Undivided Families (HUF) include a 0% tax for income up to Rs. 3,00,000, rising progressively to 30% for income above Rs. 15,00,000.
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HUF Full Form and Tax Slab New Regime
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3 min
13-June-2025

The Income Tax Act of 1961 offers various tax-saving options to Indians. HUF, or the Hindu Undivided Family, stands out as one of the most effective ways of saving on taxes. Hindu married taxpayers can pool their assets to form a HUF. HUFs are recognised as separate legal entities and taxed independently, allowing individuals to claim tax deductions and benefits under HUF registration apart from their individual deductions. This article highlights what a HUF is and how it can be used as a prudent tax-saving instrument in India.

What is a HUF?

HUF is an abbreviation for the Hindu Undivided Family. A HUF is a legal and tax entity in India. Hindu, Buddhist, Jain, and Sikh families in India can pool their assets to form a HUF and save on taxes. It is based on the concept of a joint family and includes all family members from different generations. However, the HUF is considered as a separate entity for taxation purposes. HUFs have their own PAN Cards and file ITRs independently of their members. The HUF is headed by a ‘Karta’ - generally the eldest male member - who manages the HUF’s affairs. Other members of the HUF are called coparceners. Typically, HUF assets can include gifts, ancestral property, proceeds from the sale of joint family property, property that’s acquired through a will, or HUF member contributions to the common pool.

How does HUF work?

A Hindu Undivided Family (HUF) is a legal entity under Indian tax law that allows members of a family to come together and pool their assets for income generation and tax planning. It is governed by Hindu law and is applicable to Hindus, Buddhists, Jains, and Sikhs. An HUF is formed automatically when a family starts living together and holds ancestral property. However, it must be formally registered with a PAN card and a bank account to avail tax benefits.

The eldest male member of the family becomes the Karta and manages the affairs of the HUF. Other members are called coparceners, who have an equal right in the HUF’s assets and income. HUFs can invest in mutual funds, real estate, stocks, and even start businesses. Income earned by the HUF is taxed separately, offering an additional tax benefit to families. This structure is particularly useful for efficient estate and succession planning.

Residential status of HUF

Now that you understand the meaning of HUF, let’s review how the residential status of a HUF is determined. According to the income tax laws, HUF can be formed by both resident and non-resident Indians. The residential status of HUFs is determined in the following ways:

Resident HUF: If the control and management of the HUF’s affairs is completely or partially inside India, then the HUF is a resident of India.

Non-resident HUF: If the HUF’s Karta resides outside India, the control and management of the HUF is also outside India, making it a non-resident HUF.

Resident and ordinarily resident or resident but not ordinarily resident: A HUF is considered a resident HUF if the Karta satisfies both of the following conditions:

The Karta has been a resident of India for at least 2 years out of the 10 years preceding the relevant financial year.

The Karta has been in India for a period of 730 days or more during the 7 previous years preceding the relevant fiscal year.

If the HUF fails to meet these requirements, it is classified into the resident but not ordinarily resident category.

Who are the members of the HUF?

A HUF includes all individuals belonging to a Hindu family. This means husbands, wives, children, their spouses, and their offspring are all eligible for inclusion in the constitution of a Hindu Undivided Family or HUF. HUF has coparceners who are born into the family, as well as members who become part of the HUF through marriage. According to the HUF regulations, only coparceners have the right to request the partition of the HUF, requesting the division of its assets. Prior to the amendment of the Hindu Succession Act in 2005, the coparcener status could be bestowed on only men born into the family. However, this amendment placed female members born into the family on an equal footing as their male counterparts. As coparceners of the HUF from birth, they can legally claim the partition of the HUF’s assets.

Features of HUF

Now that you understand what is a HUF and how it can be used to save on taxes, let’s review some of its key features:

  • Establishment: At least 2 male members are required for the establishment of a HUF. HUF members may or may not have inherited ancestral property.
  • Control: The Karta of the HUF enjoys full control and authority over the decision-making process. The Karta may seek advice from other HUF members but is not obligated to accept this advice.
  • Continuity: Upon the demise of the Karta, the next eldest member assumes the role of the Karta automatically.
  • Liability: Since a HUF functions as a Hindu Undivided Family business, liability is involved. All coparceners have limited liability in the HUF to the extent of their share in the business. However, Karta holds unlimited liability where his personal property may be used to repay the accumulated debts of the business.
  • Dissolution: Once formed, a HUF can only be dissolved with the unanimous consent of all its members. Upon mutual agreement and dissolution, the assets of the HUF are distributed among its members.
  • Minors: Any child born into the family automatically becomes a part of the HUF by virtue of birth.

Sources of HUF Income

A Hindu Undivided Family (HUF) can earn income from various sources, much like an individual taxpayer. Common sources include income from ancestral property, business profits, capital gains, interest earned on investments, and rental income from real estate held in the name of the HUF. These earnings are taxed separately from the individual incomes of HUF members, allowing for strategic tax planning. Additionally, any income earned through assets transferred to the HUF or received as gifts can also form part of its total income, provided it aligns with the rules laid out by the Income Tax Act.

Advantages of HUF

A Hindu Undivided Family or HUF offers several benefits, including:

  • Tax benefits and simplified tax planning: One of the chief advantages of a HUF is tax efficiency. Individual members of the HUF have to file ITRs, while the HUF itself files taxes as a separate entity, maximising tax benefits.
  • Simpler management: The creation of a HUF allows the Karta to have effective control over the decision-making process and can sign relevant documents to make investment decisions on behalf of the family. Having a singular centre of authority streamlines the decision-making process.
  • Legal recognition: The HUF structure is legally recognised in India, offering strong legal and judicial backing to the HUF as an efficient tax planning mechanism.
  • Financial support: Members of a HUF can easily avail of loans through the HUF and take advantage of deductions on student loans, home loans, etc.

HUF Income Tax Slabs and Rates for AY 2024–25 and AY 2025–26

The income tax slabs applicable to Hindu Undivided Families (HUFs), whether resident or non-resident, are aligned with individual taxpayer slabs under both the old and new tax regimes. Below is the comparative tax slab structure:

Income Range

Old Regime Tax Rate (AY 2024–25)

Surcharge*

New Regime Tax Rate (AY 2025–26)

Surcharge*

Up to Rs. 2,50,000

Nil

Nil

Up to Rs. 3,00,000

Nil

Rs. 2,50,001 – Rs. 5,00,000

5% above Rs. 2,50,000

Nil

Rs. 3,00,001 – Rs. 7,00,000

5% above Rs. 3,00,000

Rs. 5,00,001 – Rs. 10,00,000

Rs. 12,500 + 20% above Rs. 5,00,000

Nil

Rs. 7,00,001 – Rs. 10,00,000

Rs. 20,000 + 10% above Rs. 7,00,000

Rs. 10,00,001 – Rs. 50,00,000

Rs. 1,12,500 + 30% above Rs. 10,00,000

Nil

Rs. 10,00,001 – Rs. 12,00,000

Rs. 50,000 + 15% above Rs. 10,00,000

Rs. 50,00,001 – Rs. 100,00,000

Same as above

10%

Rs. 12,00,001 – Rs. 15,00,000

Rs. 80,000 + 20% above Rs. 12,00,000

Rs. 100,00,001 – Rs. 200,00,000

Same as above

15%

Rs. 15,00,001 – Rs. 50,00,000

Rs. 1,40,000 + 30% above Rs. 15,00,000

Rs. 200,00,001 – Rs. 500,00,000

Same as above

25%

Rs. 50,00,001 – Rs. 100,00,000

Rs. 1,40,000 + 30% above Rs. 15,00,000

Above Rs. 500,00,000

Same as above

37%

Rs. 100,00,001 – Rs. 200,00,000

Rs. 1,40,000 + 30% above Rs. 15,00,000

–

–

–

Above Rs. 200,00,000

Rs. 1,40,000 + 30% above Rs. 15,00,000

 

Rebate under Section 87A

Income Range

Old Regime

New Regime

Up to Rs. 5,00,000

Rebate of up to Rs. 12,500 for resident individuals

–

Up to Rs. 7,00,000

–

Rebate of up to Rs. 25,000 for resident individuals


*Note: Rebate is not applicable to NRIs.

Additional Notes:

  • A 4% Health and Education Cess is levied on total tax including surcharge under both regimes.
  • Higher surcharges of 25% and 37% are not applicable to income taxable under Sections 111A, 112, 112A, or on dividend income. For such income, the maximum surcharge is capped at 15%.

Marginal Relief on Surcharge:

Income Range

Marginal Relief Condition

Rs. 50 lakh – Rs. 1 crore

Tax + surcharge should not exceed tax on Rs. 50 lakh by more than the excess income

Rs. 1 crore – Rs. 2 crore

Same as above with Rs. 1 crore base

Rs. 2 crore – Rs. 5 crore

Same as above with Rs. 2 crore base

Above Rs. 5 crore

Same as above with Rs. 5 crore base


These revised slabs ensure greater clarity and flexibility in tax planning for HUFs under both old and new tax regimes.

Hindu Undivided Family (HUF) Rules

Key considerations for HUF accounts:

  • Family composition: An HUF must be constituted by a family unit.
  • Automatic creation: An HUF is automatically formed upon marriage.
  • Membership: HUF membership includes a common ancestor and their lineal descendants, encompassing both male and female members.
  • Religious eligibility: Hindus, Sikhs, Jains, and Buddhists are eligible to form HUFs.
  • Asset holdings: HUFs commonly hold assets acquired through inheritance, gifts, or ancestral property.
  • Financial requirements: A dedicated bank account and PAN number are essential for HUF operations.
  • Income contributions: Members may contribute their income to the HUF's common pool.
  • Tax implications: Tax benefits may be availed for eligible deposits under specific provisions.
  • Corpus division: Any division of the HUF corpus necessitates the unanimous consent of all coparceners.

Taxation of Hindu Undivided Family (HUF)

A Hindu Undivided Family (HUF) is a distinct legal entity, recognised by the Income Tax Act. It possesses a unique Permanent Account Number (PAN) and files separate income tax returns.

Key tax implications for HUFs:

  • Separate taxation: HUFs are taxed independently, at the same rates applicable to individuals.
  • Deductions and exemptions: HUFs are eligible to claim deductions under Section 80 and other applicable exemptions.
  • Insurance premiums: HUFs can take insurance policies on the lives of its members.
  • Salary disbursements: The HUF can pay salaries to its members for services rendered, which are tax-deductible expenses.
  • Investment income: Income generated from HUF investments is taxable in the hands of the HUF itself.

By understanding these tax implications, HUFs can effectively manage their financial affairs and optimize their tax liabilities.

How to save tax by forming a HUF?

A Hindu Undivided Family is taxed separately from its individual members. A HUF has a separate PAN Card and must file an ITR independently. By creating a HUF, a separate joint Hindu family business is created. As a distinct entity from its members, HUF can claim deductions under Section 80 and other applicable exemptions under various sections of the Income Tax Act. HUFs can also take out insurance policies on each of the members and enjoy tax benefits on the insurance premiums u/s 80(C). If the members contribute to the functioning of the HUF, they may be paid a salary for the same, which is, in turn, deductible from the HUF’s income. Similarly, investments can be made in the name of the HUF, and returns are taxable in the hands of the HUF instead of the individual family members. It is important to note that a HUF is taxed at the same rate as individual taxpayers.

Some of the major tax benefits enjoyed by a HUF includes*:

  • HUFs enjoy tax exemption up to Rs. 2.5 lakhs under the old regime and up to Rs. 3 lakhs under the new regime
  • Tax deductions up to Rs. 1.5 lakhs under Section 80(C) annually
  • Tax deductions can be claimed under various sections like Sections 47 and 54(B, D, EC, F, G).
  • Deductions of Rs. 1.5 lakhs on home loan principal repayment u/s 80(C)
  • Deductions of up to Rs. 2 lakhs on home loan interest payments u/s 24B
  • HUFs can invest in mutual fund schemes like ELSS and enjoy deductions under the Section 80(C) ceiling
  • Deductions on capital gains u/s 54 and 54(F)
  • Gifts received up to Rs. 50,000 are tax-free

*Note: Some of these deductions are available only under the old tax regime.

Example of how HUF is taxed?

Here's an example of how HUF is taxed for Vishal, who has started a HUF with his spouse and children.

Assumptions

  • Salary: Rs. 30 lakh
  • Income from house rent: Rs. 10 lakh

Parameters

Parameter

Vishal's Income Before HUF Formation (Rs.)

Vishal's Income After HUF Formation (Rs.)

HUF Income (Rs.)

Salary

30,00,000

30,00,000

-

Rent from House Property

10,00,000

-

10,00,000

Deduction on House Rent

3,00,000

-

3,00,000

House Rent Income

7,00,000

-

7,00,000

Taxable Income

37,00,000

30,00,000

7,00,000

Section 80C Deduction

1,50,000

1,50,000

1,50,000

Net Taxable Income

35,50,000

28,50,000

5,50,000

Tax Payable

9,12,600

6,94,200

23,400


Total tax payable by Vishal (including HUF): Rs. 7,17,600

Tax saved due to HUF formation: Rs. 1,95,000

How to form or create HUF?

A Hindu Undivided Family (HUF) can be formed through a simple three-step process:

Step 1: Create an HUF Deed Prepare a legal document outlining the HUF's rules and guidelines. This deed should include details about the Karta (manager), coparceners, and other family members.

Step 2: Obtain a PAN Card Apply to the Income Tax Department for a Permanent Account Number (PAN) card for the HUF. This PAN card is essential for financial transactions and tax filing on behalf of the HUF.

Step 3: Open a Bank Account Open a dedicated bank account in the name of the HUF. This account will be used to manage the HUF's financial transactions and funds separately from individual member accounts.

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Understanding HUF formation and structure

The following table provides a comprehensive overview of key aspects related to HUF formation and structure:

Aspect

Description

Family formation

A HUF cannot be formed by an individual; it is automatically created upon marriage.

HUF composition

A HUF comprises a common ancestor and their lineal descendants, including wives and unmarried daughters.

Eligible communities

Hindus, Buddhists, Jains, and Sikhs are eligible to form HUFs.

HUF assets

Typically, HUF assets include gifts, inheritances, ancestral property, proceeds from joint family property sales, and contributions from HUF members.

Formal registration

The HUF must be formally registered by creating a legal deed outlining member details and business activities.

PAN and bank account

The HUF should obtain a PAN card and open a dedicated bank account in its name.


By completing these steps, an HUF becomes a distinct legal entity capable of holding assets and conducting financial transactions. Importantly, the HUF's income is taxed separately from its individual members' income.

Disadvantages of HUF

The creation of a HUF poses some serious disadvantages as well:

  • Equal rights on assets can cause problems: Each member of the HUF has an equal right to the HUF’s assets. This can result in complications when unanimous consent from all members is needed for distribution or sale.
  • Limitations on partnerships: According to regulations concerning HUF, a HUF cannot become an equal partner in a business and the income earned is taxed as HUF income.
  • Complex dissolution: Dissolving the HUF is a complex process that requires adherence to different legal norms. Apart from all members agreeing to a partition, the asset distribution itself can lead to disputes among members.
  • Reducing relevance: India has witnessed a steady move towards nuclear family structures, with the joint family system quickly losing relevance.

HUFs tax rates - Tax slabs for AY 2024-2025

The Finance Act 2023 has introduced significant changes to the Indian Income Tax Act. Starting from Assessment Year 2024-25, the new tax regime will be the default tax regime for individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs) excluding cooperative societies, Body of Individuals (BOIs), and Artificial Juridical Persons.

Options to choose tax regime

Eligible taxpayers have the flexibility to opt for the old tax regime, which offers various deductions and exemptions.

  • Non-business income: Taxpayers with non-business income can choose their preferred regime annually while filing their Income Tax Return (ITR).
  • Business and professional income: 
    • Initial choice: Taxpayers with income from business and profession must use Form 10-IEA to opt for the old regime before the ITR filing deadline. 
    • Subsequent changes: Switching between regimes is allowed only once in a lifetime for taxpayers with business and professional income.

Tax rates for HUFs

The following tax rates apply to HUFs (resident or non-resident) for the previous year:

Income tax slab

Old tax regime

New tax regime (Section 115BAC)

Up to Rs. 2,50,000

Nil

Nil

Rs. 2,50,001 - Rs. 5,00,000

5% above Rs. 2,50,000

5% above Rs. 3,00,000

Rs. 5,00,001 - Rs. 10,00,000

Rs. 12,500 + 20% above Rs. 5,00,000

Rs. 15,000 + 10% above Rs. 6,00,000

Above Rs. 10,00,000

Rs. 1,12,500 + 30% above Rs. 10,00,000

Rs. 45,000 + 15% above Rs. 9,00,000

 

 

Rs. 90,000 + 20% above Rs. 12,00,000

 

 

Rs. 1,50,000 + 30% above Rs. 15,00,000

 

Hindu Undivided Family (HUF) checklist

HUF tax implications and operational considerations:

  • Annual income tax filing: The HUF is required to file an annual income tax return, accounting for all income received in its name. It's essential to note that the Karta may be held liable for income diverted to the HUF with the intent to evade taxes.
  • Asset ownership and management: Assets contributed to the HUF become common property. The original owner must renounce ownership in favour of the HUF. Consequently, the sale of such assets necessitates the consent of all HUF members.
  • Membership and management: The HUF's membership expands with births and marriages within the family. Managing a large HUF, including maintaining accurate records of assets and funds, can be complex.
  • Dissolution challenges: Dissolving an HUF is a cumbersome process requiring unanimous consent from all members.
  • Karta succession: In the absence of male members, a female member can assume the role of Karta. However, the specific tax implications of this arrangement may not be entirely clear.
  • Tax implications of property transfers: Property transferred to the HUF without sufficient consideration will be clubbed with the income of the transferor.
  • Separate property and income: Wealth brought into the HUF by a female member from her maiden home remains her separate property, and the income derived from it is taxable in her hands, not as HUF income.

Other topics you might find interesting

Short Term Capital Gains Tax

New Income Tax Slabs and Rates

Direct Tax Code 2025

Hindu Undivided Family Act

Income Tax Returns for Mutual Funds

Inheritance Tax

Net Investment Income Tax

Short Term vs Long Term Capital Gains

Assessment Year and Financial Year

Income Tax Return Extended Date

Section 80C of Income Tax Act

Long Term Capital Gain Tax on Property

 

Tax saving on mutual funds as Hindu Undivided Family (HUF)

A Hindu Undivided Family (HUF) is recognized as a separate legal entity under Indian tax law, allowing it to avail of tax benefits distinct from its individual members. This structure can be particularly advantageous when investing in mutual funds, offering opportunities for tax optimization and efficient wealth management.​​

Tax Implications for an Individual vs. HUF

Consider a scenario where a family has the following income:​

  • Gross salary: Rs. 500,000 (Rs. 425,000 after standard deductions)​
  • Short-term capital gains (STCG): Rs. 200,000​
  • Long-term capital gains (LTCG): Rs. 800,000​
  • Interest income: Rs. 50,000​

For an Individual:

  • Taxable Salary: Rs. 425,000. After the Rs. 300,000 exemption, Rs. 125,000 is taxed at 5%, resulting in Rs. 6,250 tax.​
  • STCG Tax: Rs. 200,000 taxed at 20% equals Rs. 40,000.​
  • LTCG Tax: After the Rs. 125,000 exemption threshold, Rs. 675,000 is taxed at 12.5%, amounting to Rs. 84,375.​
  • Total Tax Before Cess: Rs. 6,250 + Rs. 40,000 + Rs. 84,375 = Rs. 130,625.​
  • Cess (4%): Rs. 5,225.​
  • Total Tax Payable: Rs. 135,850.​

For an HUF:

  • Basic Exemption Limit: Rs. 300,000.​
  • STCG: Rs. 200,000 is fully covered under the exemption, resulting in no tax liability for this component.​
  • LTCG: After utilizing the remaining Rs. 100,000 of the basic exemption, Rs. 700,000 is taxed at 12.5%, resulting in Rs. 87,500.​
  • Total Tax Before Cess: Rs. 87,500.​
  • Cess (4%): Rs. 3,500.​
  • Total Tax Payable: Rs. 91,000.​
  • Tax Savings: By routing mutual fund investments through an HUF, the family saves Rs. 44,850 in taxes compared to individual taxation.

Advantages of HUF for Mutual Fund Investments

  • Independent Taxation: Income from mutual funds under an HUF is taxed separately from individual incomes, preventing clubbing and reducing the likelihood of higher tax brackets.​
  • Tax Exemptions and Slabs: An HUF can utilize the Rs. 300,000 basic exemption and separate slab rates for tax optimization.​
  • Efficient Wealth Creation: Investments in mutual funds under the HUF structure grow tax-efficiently, benefiting from compounding and long-term wealth management strategies.​
  • Family Financial Planning: Income generated by an HUF can be reinvested or used for family needs, such as purchasing property or other assets.

Is HUF suitable for you?

A Hindu Undivided Family (HUF) can be an effective structure for managing family wealth and saving on taxes if you belong to a Hindu, Sikh, Jain, or Buddhist family. It allows a family to be treated as a single tax entity under the Income Tax Act, 1961. If you have ancestral property or expect to receive joint family income from assets such as rental income, interest, or business profits, creating an HUF could be beneficial.

The key advantage of forming an HUF is the ability to claim an additional basic tax exemption limit, separate from the individual members’ tax liabilities. For instance, both the HUF and its members can file separate returns and enjoy tax deductions under sections like 80C. This helps in legally reducing the overall tax outgo of the family.

However, HUFs come with limitations. Only the Karta (typically the eldest male or female) manages the affairs, and all members must agree on key decisions. It is not ideal for salaried individuals with no joint income or assets. Therefore, HUFs are most suitable for families with a shared financial legacy or ongoing joint income sources, seeking to optimise tax planning and asset distribution within the family.

Conclusion

Just like other tax-saving strategies, forming a Hindu Undivided Family (HUF) comes with its own pros and cons. While it helps in reducing tax liability and simplifies asset management for joint families, it may also trigger complications—especially in today’s increasingly nuclear family structure. Disputes over control, succession, or claim over assets can sometimes outweigh the tax advantages.

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Frequently asked questions

Who is eligible for HUF?
Only families are eligible to form HUFs. A HUF consists of a common ancestor and all his descendants, including wives and daughters. HUFs can be formed by Hindus, Buddhists, Jains, and Sikhs.

What are the benefits of HUF?
A HUF offers tax-saving benefits. HUFs are taxed as separate entities and qualify for tax deductions u/s 80(C), 80(D), 80(G), and others. Additionally, they also qualify for capital gains deductions u/s 54 and 54(F).

What type of account is a HUF?
HUFs can open all types of savings and term deposit accounts, including fixed and recurring deposit accounts.

Who comes under the Hindu Undivided Family?
All persons descended from a common ancestor, including the wives and daughters of the male descendants, come under HUF.

What are the 2 conditions for claiming HUF status?
The first condition is that the family must fall within the eligible communities, namely, Hindu, Jain, Sikh, and Buddhist. The second condition is that the members must be the lineal descendants of a common ancestor.

Can a salaried person create HUF?
Salaried people can open a HUF account post-marriage. However, to avail of HUF benefits, the individual must have a child.

Can a husband and wife form HUF?
HUF can be formed with just 2 members, one of who should be a coparcener. While a husband and wife can form a HUF, the wife is a member and not a coparcener. Therefore, the HUF won’t enjoy any tax benefits.

Can I buy a car in my HUF account?
Yes, you can apply for a car loan using the HUF account and claim depreciation tax benefits.

What is the minimum balance in a HUF account?
The minimum balance for a HUF account depends on the type of account in question and the bank’s internal policies.

How to start HUF?
To start a HUF, you require a family with descendants from a common ancestor. You can start a HUF if you fall within the eligible communities. To do so, you must create a separate PAN Card for the HUF and formally register with a HUF deed.

What is the income tax rate for HUF?

 

Income Slab

Old Tax Regime

New Tax Regime

Up to ₹5,00,000

Nil

Nil

₹5,00,001 to ₹10,00,000

10%

10%

₹10,00,001 to ₹20,00,000

15%

15%

₹20,00,001 to ₹50,00,000

25%

25%

Above ₹50,00,000

37%

25%
Is HUF exempted from income tax?

And being a separate entity, the HUF enjoys a basic tax exemption of Rs 2.5 lakh. So, imagine that you create an HUF consisting of you, your spouse and two children. In addition to income tax benefits you enjoy individually, you can also avail of an additional basic income tax exemption of Rs 2.5 lakh each year.

What is the TDS rate for HUF?

What is the rate of TDS under Section 194C- TDS on contractors? The payer is required to deduct TDS at 1% in case the payment is made to an individual or HUF, and 2% if the payment is made to any other person.

What are the 2 conditions for claiming HUF status?

Family Formation

HUF cannot be formed by an individual; it can only be created by a family unit.

Formal Registration

Once formed, the HUF must be formally registered in its name. This involves creating a legal deed that contains details of HUF members and the business activities of the HUF.
Can husband and wife create HUF?

HUF can be formed with just two members, one of whom must be a coparcener. For tax purposes, HUF must have at least two coparceners. While a husband and wife can create an HUF, the wife is considered a member, not a coparcener.

Is it compulsory to file ITR for HUF?

Do I still have to file my ITR? Yes, deducting TDS and filing a tax return are two separate legal compliances. Income tax should be paid on your taxable income as per the provisions of the Income Tax Act.

Is money received from HUF taxable?

As per Section 56 (2), any gift received from specified relatives is tax-free in the hands of the recipient. A member of the HUF is treated as a relative of the HUF; hence, there is no tax implication when receiving money from the HUF.

What is the tax slab for 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.

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  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

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Disclaimer:


Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

This information should not be relied upon as the sole basis for any investment decisions.Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

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Disclaimer:

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form:

(ii) carry customized/personalized suitability assessment:

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.

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