HUF means Hindu Undivided Family. A Person can save taxes by creating a HUF and transferring it to form a HUF. HUF is taxed separately from its members. A Hindu family can come together and form a HUF. The Buddhists, Jains , and Sikhs can also form a HUF.
HUF has its own PAN and files tax returns independent of its members. A HUF is taxed separately from its members, therefore, deductions (such as under Section 80) or exemptions allowed under the tax laws can be claimed by it separately.
For example, if you and your spouse along with your 2 children decide to create a HUF, all 4 of you as well as the HUF can claim a deduction for Section 80C.
HUF is usually used by families as a means to toll of tax planning and to build the assets. HUF usually has assets which come as a gift, a will, or ancestral property, or property acquired from the sale of joint family property or property contributed to the common pool by members of HUF.
Once a HUF is formed it must be formally registered in its name. A HUF should have a legal deed. The deed shall contain details of HUF members and the business of the HUF.
A PAN number and a bank account should be opened in the name of the HUF. S K Nagda & Company is constantly enjoying TOP CA Consultancy Firm in Udaipur Rajasthan India for the matters of Hindu Undivided Family (HUF).