12 April 2009
PLZ GIVE INFORMATION ABOUT HOW H.U.F. HELPS IN CONVERSION OF BLACK MAONEY INTO WHITE MONEY? PLZ TELL ME SOME OTHER TAX BENEFITS OF FORMATION HUF?
I WILL BE VERY GRATEFUL TO YOU FOR THIS ACT OF KINDNESS.... WAITING FOR A QUICK REPLY. REGARDS, MUNISH
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. 1.50 lakh for his individual income and another Rs. 1.50 lakh for his HUF income. Besides, he would also be eligible to a further income tax deduction or exemption of Rs. 1 lakh under Section 80C in respect of LIP 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, whereas the taxable individual wealth is eligible to a general exemption of Rs. 15 lakh, the HUF’s taxable wealth is also eligible to a further general exemption of Rs. 15 lakh. 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.
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