Tips For Saving Income Tax via HUF
Every individual Start to think about tax saving tricks when the time come to pay tax. Majority of people know that they could save some tax amount by using HUF. HUF stands for Hindu Undivided Family. In india, there is a culture and habit for joint families. If an individual in a joint family gaining any amount from rent or anything else then the amount would be divided into all members of the family and not to a single individual. If you are married to a Hindu, Sikh, Buddhist, or Jain and doesn’t belong to any kind of fairer sex or you ae either gifted or inherited any kind of properties, jewellery, business and so on, there could be different ways
for reducing your burden by forming the HUF (Hindu Undivided Family).
Benefits of using HUF
The benefit of HUF is, the HUF is treated as a person and is taxable as a distinct tax-entity. The income will be calculated by the same method as in the case of individuals and the following deductions are available to HUF for calculating tax.
1. Deduction 80C
2. Deduction 80D
3. Deduction 80DD
4. Deduction 80DDB
5. Deduction 80G
Another important benefits are HUF can give or receive gifts, i.e, any person who is not a coparcener may make a gift to the HUF.
Some important points related to tax planning by HUF
If aggregate amount of gifts exceed Rs. 50,000 in a financial year, then the gift received by a HUF is taxable as income of HUF.
HUFs are not permitted to open a PPF A/c w.e.f. 13.5.2005.
HUF can be used to increase tax payers for entitlement of basic exemption of 2 lakh and other deductions. But clubbing of income should be considered by the assessee while transferring any amount of HUF.