Hindu Undivided Family
(HUF)
Hindu Undivided Family(HUF)
HUF is an abbreviation for Hindu Undivided Family. You can avoid taxes by forming a family unit and pooling assets to establish a HUF. It is taxed independently from its members. A Hindu family can create a HUF and has its PAN and files tax returns independently of its members. A single individual cannot form a HUF; only a family is eligible to form it, which can range from diversified religions such as Hinduism, Buddhism, Jains, Sikhs, and more.
The HUF still exists even after the common ancestor's death, and the next eldest male member becomes the family's leader known as the "Karta." In financial terms, we might refer to him as the "family manager." The HUF exists even after all of the male members have died. HUF requires a legal deed. The deed must include Information on HUF members and the HUF's business. In the name of the HUF, a PAN number and a bank account should be created.
TAX BARR will get your HUF Registration smoothly and swiftly without any hassles.
Benefits of Registering HUF:
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Separate Legal Entity
One of the primary advantages of the Hindu Undivided Family is that it is treated as a separate legal entity, which enables the HUF to have a distinct Pan Card and bank accounts in its name.
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Tax-Free Gift
A monetary donation of up to INR 50,000 received in cash, cheque, Demand draft, or another form by an individual/HUF is exempt from income tax. In addition, Karta's gift to his daughter on her marriage is exempt from taxation.
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HUF Deed
HUF is a relatively simple agreement to create. It is made solely using a HUF Deed. It is a formal legal document printed on stamp paper that indicates the names of the parties and the 'Karta' and the nature of its business.
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Tax Savings
By forming a HUF, you will be legally recognized and allows you to take advantage of tax benefits.
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Equal Rights
Each member has an equal claim to a HUF's property. New family members who join the family by birth or marriage get an equivalent portion of the property. Even an unborn kid in the mother's womb will have equal rights.
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Inheritance
In the name of the HUF, inheritance is accepted. After the death of the individual who drafted the Will, the legal heir would have a vested interest in the inheritance; his children are also regarded as legal heirs to the property so inherited.
Documents required:
PAN CARD
A self-attested copy of PAN Card
of Karta
Address Proof
Utility Bill (Electricity Bill) of the place
of business
Bank Details
Details of the
bank account
Rent Agreement and NOC
Rent Agreement and NOC from the owner of the place of business, if rented
Other Details
Deed of declaration of HUF/ List of coparceners
ID Proof (Driving License/Passport/Voter ID)