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What is Hindu Undivided Family (HUF) ?

Hindu Undivided Family (HUF) is not defined under the Income Tax Act but is covered under the Hindu Law. HUF consists of all individuals who are lineally descended from a common ancestor and also comprises unmarried daughters. Under section 2(31) of the Income-tax Act, 1961, a HUF is considered a “person" and, therefore, is treated as a separate entity for the purpose of tax assessment. Often families that own ancestral properties and businesses obtain a separate Permanent Account Number (PAN) in the name of the HUF. HUF is not formed by a contract but by the status of a family i.e., it is created automatically in any Hindu Family. Having a common ancestor is a pre-requisite to form a HUF.

Procedure to Hindu Undivided Family (HUF)
  • Select your package
  • Make Online Payment
  • Submission of Documents
  • Drafting and Executing HUF Deed.
  • Your HUF registrattion is done.
Documents required for Hindu Undivided Family (HUF)
  • PAN of HUF
  • Deed of declaration of HUF/ List of coparceners
  • Bank pass-book/bank statement in the name of HUF
  • Photograph, Proof of Identity, Proof of Address, and PAN of Karta
Benefits of Hindu Undivided Family (HUF)
  • The major advantage of creating a Hindu Undivided Family Account is that the family gets an extra PAN Card and can split the family income and thereby resulting in tax saving and reducing the tax outgo.
  • By forming a Hindu Undivided Family, you can optimize your tax liabilities and also include your family members to benefit in the future
  • HUF members find it easy to avail loans.
  • You can form different taxable units of HUF using the loopholes of will or gift. Any asset or savings made or insurance premium disbursed by the HUF is subtracted from the net income for tax purposes.
  • Every member of the family can deposit their income in the common corpus.
  • HUF is very easy to form. It comes into existence merely by a HUF Deed. It is a formal legal document on a stamp paper which clearly states the names of the ‘Karta’ and the co-parceners (other members)
  • Each member has an equal right to the property owned by a HUF. New members that get added to the family by way of birth or marriage also have an equal share in the property. An even unborn child in the womb of the mother will have equal rights.
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