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Advantage of HUF ?

Krishna seva das (TAX CONSULTANT) (1070 Points)

22 June 2009

HUF ..

HOW IT HELP INDIVIDUALS ..

HOW CAN ONE TAKE ADVANTAGE OF IT ..

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3 Replies

Ashish M (Chartered Accountant) (2731 Points)
Replied 22 June 2009

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.

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Arpit Gupta (Chartered Accountant ) (95 Points)
Replied 22 June 2009

HUF can serve as tax saving tool , reasons are as follow -

by creating HUF one can have an extra exemption of Rs.150000
some times HUF saves its members from direct consequeses like notice or penalties etc. of tax authorities (due to voilation of law)
within the same no. of members one can create more than one HUF by changing the KARTA and property and thus with every new HUF one can have exemption of RS.150000