Understanding the Taxation for Hindu Undivided Family
- HUF being an independent legal entity is treated separately from its members and has its separate PAN card, creating a separate stream of income.
- A Trader can trade in both the account for saving the taxes.
Taxation for HUF
- HUFs are subject to income tax based on the applicable slab rates.
- Basic Exemptions of Rs. 2.5 lacs is available for HUF
- Rebate under Section 87A is not available in case of HUF
- Deductions u/s 80C, 80D, 80DD, 80DDB, and 80TTA can be enjoyed by the HUF.
FAQ's related to Taxation for HUF
Optimizing tax planning for an HUF involves strategic allocation of income-generating assets among family members, leveraging deductions and exemptions available under the Income Tax Act, and staying updated with the latest tax regulations. Seeking professional advice from a tax consultant or chartered accountant can also help in effective tax planning for an HUF.
No, HUF formation requires at least two members, including the Karta.
Yes, as per recent amendments, a daughter can be the Karta if she is the eldest coparcener.
No, HUF income is taxed separately, and individual members cannot be taxed for HUF income.
Yes, HUF can be dissolved with the consent of all its members through a formal deed.
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