A Common question from CA.

Sir , how can I save my tax

One of the legal way is creating HUF

What is HUF ?

In India there is a culture of joint families and there are many Income which arise to family as a whole and not to one specific individuals say for eg. Rent. If rent is received from a property which is jointly owned by all the members , that the income will be taxed in hand of whole family and in hand of one specific individual.

Logic behind creating HUF .

As a new PAN card would be alloted to the whole family , it will also enjoys the benefits of Income tax slab .

How to create a HUF ?

No formal action is required to be taken at the time of marriage for creation of an HUF and only creation deed is to be furnished on a stamp paper.

HUF consist of :

Karta : genrally father Co-parceners : Co- parcener is the

person who has the right to demandthe share of the property of the family if he/she want to part away with the family ,with his or her share .

Note : All member are Co- parcener.

How to put fund in HUF ?

There are numerous ways , some popular are :

One can receives gift from member of bigger huf.

Parent can also gift fund to an huf via gift deed clearly specifying that gift is directed toward Son’s huf.

Gift can be accepted from stranger but only upto

50000 /-

Benefits of forming HUF

HUF is eligible for deduction under section 80D ,80G ,80C.

A HUF also enjoy exemption under section 54 and 54F in respect of capital gain .

HUF also get advantages of slab rate taxability.

also , under wealth tax act,1957.