What are the practicle benefits of creating HUF ?
This query is : Resolved
23 September 2010
What are the practicle benefits of creating HUF ?
23 September 2010
The most significant advantage is that any income received by an individual as a member of the HUF from its corpus, is not taxable in his/her individual capacity, as it would be taxable in the hands of HUF. The income of the HUF is eligible to the same slabs and basic exemptions as available to an individual. The HUF is also eligible for deductions under Section 80C.
“Hence, if the total personal income of an individual is split into what is assessed in his hands and what is assessed in the hands of the HUF of which he is a member, there is an overall tax savings,” says Amitabh Singh, partner, global tax advisory, Ernst & Young, India. However, you should also keep in mind that once income of family is assessed as an HUF, it would continue to be assessed as HUF income, until such time the HUF is partitioned completely.
“Hence, if the total personal income of an individual is split into what is assessed in his hands and what is assessed in the hands of the HUF of which he is a member, there is an overall tax savings,” says Amitabh Singh, partner, global tax advisory, Ernst & Young, India. However, you should also keep in mind that once income of family is assessed as an HUF, it would continue to be assessed as HUF income, until such time the HUF is partitioned completely.
23 September 2010
Tax benefits of HUF:
The question of HUF status for a Hindu buyer or seller of any property assumes importance because of certain tax advantages attached with HUF under the income tax and wealth tax laws. Thus, if an individual has personal income and has also HUF income, he would be entitled to have an exemption of Rs 160,000 for his individual income and another Rs 160,000 for his HUF income.
Besides, he would also be eligible to a further income tax deduction or exemption of Rs 100,000 under Section 80C in respect of LIC premia, PPF contribution, NSC, etc., both on individual and HUF income separately.
Besides, under the Wealth Tax Act, 1957 too, separate exemptions are available for individual property and HUF property.
Thus, where the taxable individual wealth is eligible to a general exemption of Rs 150.000, the HUF's taxable wealth is also eligible to a further general exemption of Rs 150,000. Hence, persons having immovable property and jewellery and motorcars under HUF status stand to gain from the extra exemption under Wealth Tax Act as well.
The question of HUF status for a Hindu buyer or seller of any property assumes importance because of certain tax advantages attached with HUF under the income tax and wealth tax laws. Thus, if an individual has personal income and has also HUF income, he would be entitled to have an exemption of Rs 160,000 for his individual income and another Rs 160,000 for his HUF income.
Besides, he would also be eligible to a further income tax deduction or exemption of Rs 100,000 under Section 80C in respect of LIC premia, PPF contribution, NSC, etc., both on individual and HUF income separately.
Besides, under the Wealth Tax Act, 1957 too, separate exemptions are available for individual property and HUF property.
Thus, where the taxable individual wealth is eligible to a general exemption of Rs 150.000, the HUF's taxable wealth is also eligible to a further general exemption of Rs 150,000. Hence, persons having immovable property and jewellery and motorcars under HUF status stand to gain from the extra exemption under Wealth Tax Act as well.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- TDS U/S. 194NF
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Applicable TDS rate for sale of property in Nov 2024
- Import license renewal
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
