HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. Members of the HUF are called coparceners. They are related to each other and to the head of the family
The HUF is treated as a separate entity for income tax purposes, meaning it gets a separate PAN and is taxed independently.
The HUF can claim deductions under various sections, such as Section 80C (investments), 80D (medical insurance) etc.
Transfer income-producing assets (like property or investments) to the HUF, you can split income among family members, potentially lowering the overall tax rate.
Since HUFs enjoy the same slab rates as individual taxpayers, distributing income between the individual and the HUF can reduce the overall tax liability
– Gifts received from family members on specific occasions (like marriage) are exempt from tax. – Certain incomes, such as agricultural income, are exempt under specific conditions.