Thread by @taxologyin

Indian Income Tax has a peculiar category of taxpayers i.e. HUF.

So, Let's understand what is HUF ? [ A 🧵]

@CA_HarshilSHETH @TaxationUpdates @PratibhaGoyal @caanuragwriter #HUF #incometax #taxpayer

The Income Tax Act provides several opportunities for taxpayers to reduce their tax liabilities in a legitimate manner.

One such aspect is the creation of the HUF or the Hindu Undivided Family

HUF's features:-

a. HUF is governed under Hindu law board & could be formed by a married couple or by a family

b. Hindus, Buddhists, Jains & Sikhs can form HUFs.

c. HUF consists of a common ancestor and all of his lineal descendants, including their wives & unmarried daughters

d. Senior most male member of the family would become ‘Karta’, while other family members are coparceners.

e. The karta manages the day-to-day affairs of the HUF.

f. A HUF is created through executing a deed, the deed shall contain details of HUF members & the business of HUF.

g. For the sake of income tax, the HUF is considered as a separate entity and is therefore taxed separately.

h. The income tax slab for HUF is same as that of an individual, with an exemption limit of Rs 2.5 lakh.

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