HUF / H!ndu Undivided Family - A thread
HUF or H!ndu undivided family is a special provision under the income tax act which allows H!ndu families to enjoy lesser payable income tax as compared to any other individual.
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It also encompasses Buddhist, Ja!n & Sikh families.
HUF Essentially allows a Joint or any family 4 that matter 2 be treated as an individual & the family’s income 4m inherited property, wills and gifts 2 be taxed separately rather than being clubbed with individual’s income.
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Essentially they can divide their income in two parts.
What does that mean? In essence, It means that it allows the individuals to reduce the payable income tax, as they do not have to consider income from HUF when calculating “their own” taxable income.
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The income from inherited property,wills, gifts is accounted under HUF (with a separate PAN card) and since it is not summed with individual’s income, it warrants a lower payable tax.
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What’s interesting is that, HUF is based on H!ndu law, which does not govern other families allowed to avail benefits of HUF, i.e Sikhs, Buddhists and Jains.
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