Translate

Showing posts with label HUF. Show all posts
Showing posts with label HUF. Show all posts

Implications of forming HUF on Income tax

Implications of forming HUF on Income tax

While computing the income tax on the income of an individual, first Rs. 2,50,000 are exempt, and such limit of income exempt from tax is known as basic exemption limit (BEL). The exemption is also available in the case of Hindu Undivided Family (HUF). The family members together can form HUF and take separate PAN for it. In such case, the deductions are also applicable on both HUF and individual accounts of family members. In case of deduction u/s 80C, apart from all family members, the HUF can also claim the deduction and save the taxes.

How HUF works in saving taxes on incomes of family members?

All family members form a Hindu Undivided Family (HUF) and took a separate PAN number for it. The HUF is formed as a joint business by family members. The members can take a salary from the revenues earned by HUF instead of their contribution to the business and commercial operations of HUF. The business starts earning revenues and paying salaries to the family members. To claim deduction u/s 80C, the HUF’s PAN can be used to take the insurance cover of the life of members. After forming the HUF, the income from house property is treated as income of HUF instead of any family member.

Assets of Hindu Undivided Family (HUF)

Whenever any gift is received or property is acquired as ancestral property or acquired by the contribution of all family members, it becomes the property of HUF and the rent from such property is considered as income of HUF instead of the income of family members. The common pool of assets whenever generates any income that is quantified as the income of HUF.

Why do people hesitate to form HUF for saving taxes?

Once the HUF is formed and assets are purchased jointly in the name of HUF. The common property is managed by all family members and due to the maintenance of equal rights of property, each family member took less interest to spend upon assets, and at the time of dissolution of HUF, there are a large number of conflicts among the family members to get equal right in the revenues generated from the business. At the time of dissolution, when assets are distributed among the family members, then such income is quantified as the individual income of each family member, leading to more tax liability. 
*Copyright © 2018 Dr. Lalit Kumar. All rights reserved. 


Auto_1

Horizontal Responsive1

Popular Posts

LoP_1

Special Offer!

Funny Baba

Free Seminars

Featured post

Dr. Lalit Setia CV

Free Notes

Tips to Grow

Earn Money

Popular Posts

Free Download

Tax Saving

Fun in Life

Labels

Professional Guidance Government Income Tax Tax Deduction at Source General Knowledge Important Questions Income Tax TDS Accounting Deduction Governance Haryana Income Tax Return Latest Questions Competitive Examination Current Affairs Drawing and Disbursing Officer Audit Auditing Covid Financial Financial Management Financial Terminology Goods and Services Tax India Knowledge Lalit Kumar Lalit Kumar Setia Money Skills Tax Planning Virus Accounts Attitude Banking Compliance Currency Economic Problem Employee Facts Free Notes Functions GST Government Accounting Government eMarketplace Incomes Information Interest Omicron Virus Organization Payment Science Scientific Causes Section 80C TDS on GST Tips Tricks Very Important Questions answers Administration Advance Tax Anti-Virus Automatic Back Up Balance Sheet Bitcoin Certificate of TDS Computer Control Corruption Creativity Cryptocurrency DDOs Deductions Deductor Deductors Development Dr. Lalit Kumar Duties EPS Economy Employer English Evaluation Example Expenditure FAQs Finance Financial Accounting Financial Administration Financial Control Frustration GeM General Studies Geography Google HRA Information Technology Investment Life Management Meditation Omicron Performance Planning Positivity Process Procurement Public Public Administration Public Services Purchase Matters Questions on General Studies Resources Resume Saving Services Stress Success System Tax Collection Taxable income Technique Technology Tender Training Trust 26AS 80GG 80GGC AIS Statement ATM Abatement Abbreviations About Dr. Lalit Setia Accountant's Duties Accounting Heads Accounting Standards Accounts Branch Accrual Accumulated Fund Act Action Administrative Admissibility of DA Advance Allowance Almighty Amalgamation Amazon Amount Amrapali Group Android Annual General Meeting Annual Information Statement Anomaly Anti-Corruption Anti-virus Protection Antonyms Appraisal Appreciation Arbitrator Arrears Articles of Association Asset Auctio Audit concerns in procurement Automated Teller Machine Automatic Teller Machine Autorised Capital Average Award Bad Debts Balance of Payments Bankrupt Barter Benchmark Bhagat Prahlad Bid Bikaner Bio-Data Bitcoins Bitcoins Network Block Chain Blood Breathing Bribe Buddha Budget C M Window CV Canada Cards Caring Nature Cash Book Cash Flows Central Bank Chapter Character China Clerks Commitment Common Man Communication Communization Competitive Examinations Computation Computer Virus Computerization Conflict Contacts Contribution of Employees Corona Crime Crude Oil Culture Curriculum Vitae Custody Cyber Cybercrime Data Dearness Allowance Debit and Credit Decision Making Deduction under section 80GG Delay in Service Delhi Department Dera Sacha Sauda Desktop Devices Digital Transformation Double Click Double Entry System Dr. Lalit Setia EPF Earnest Money Deposit Earning Money Economic Growth Electronic Payment System Employment Energy Solutions Environment Evasion Examination Exempt Exemption Exemptions Expenditures Experience Exploitation Facebook Failure Festivals Final Accounts Financial Rules Financial Statements Formula Frauds Games General Generation Gap Goals Google search bar Government Deductor Government Officers Grades of Employees Gurmeet Ram Rahim Singh HRMS HUF Harish Chandra Higher Education Hindu Undivided Family History Home Loan House Building Advance House Property House Rent Allowance How to stay protected Human Resource Management System Humanity IAS Officers IT Skills ITR Importance Income Statement Income Tax Changes Income Tax Refund Income and Expenditure Account Income from Gifts Indirect Cost Innovation Internet Interpersonal Interpretation Inventory Inventory Management Investigation Investments Irregularities Jiomeet App Jokes Kids Labour Laptop Laundering Leadership Leadership Tussle Learn Learn English Learn Excel Shortcuts Learning Ledger Ledgers Liquidity Logical Lokpal Lost Crypto currencies Love MS-Office MS-Word Maldives Mankind Mask Material Mathematics Matters Meaning Measurement Equipment Meerabai Messages Methods Minimum Income Scheme Misuse Mitigation Mobile Monitor Monitoring Morality Motivation Mumbai Lockdown NPS National Highways National Pension National Pension System Nationwide Payment News Non Performing Assets Non-performance Official Life One Liner Questions Outstanding PAN number Pakistan Parents tips Pebbles Penalty Pension Per Day DA Petroleum Phonebook Practices Prevention Prices Prime Minister Private Gain Probability Problem Procedure Protection Publica Publishing Purchase Question Quotation Quotes Rational Decisions Rebate Reforms Register Registration Relationship Rent Paid Reporting Research Retirement Robert Vadra SAP SWOT Analysis Saint Ravi Dass Salaries Saudi Arabia Scam Scientific Searching emails Section 234 (a) Section 234 (b) Section 234 (c) Section 87A Security Security of Bitcoins Self Growth Shortcut Smashwords Social Activists Software Space Speculation Spyware Standard Deduction Standard Deduction on Salaries Standards Statistics Story on Husband and Wife Study Material Sugamya Pustakalaya Superintendent Symbols Symptoms of Omicron Synonyms TA Rules TAN TDS Payment Talent Search Tax Credit Taxation Taxpayers Techniques for fast and efficient work Thought Tips for Students Toddlers Tools of Rulers Tourism Trial Balance Type UCP Uncertainty Unemployment Uniformity Unique Code of Payee United States of America Users Using Asterisk Using Quotes Using Site Using minus Utilization Utilization Certificate Vigilance Bureau Whatsapp Working Capital e-Payments e-filing eMarketplace eProcurement financial procedures gmail immunity innovative solutions pandemic records management red-handed speed vaccine बैंकिग मापने वाले यंत्र राष्ट्रीय राजमार्ग

Happy Moments

Learn and Update

Popular Posts

Auto_1

Horizontal Responsive1