Why Every Indian Should Know About HUF
A Hindu Undivided Family (HUF) is a separate tax entity under Indian law. It allows families to pool income and save taxes legally. HUFs can own assets, earn income, and claim deductions separately from individual members.
Did You Know? HUFs are not just for Hindus! Buddhists, Jains, and Sikhs can also form a HUF under Indian law.
How HUFs Save Taxes
| Tax Benefit | Advantage |
| ₹2.5 lakh exemption | Reduces taxable income |
| Separate 80C deductions | Save ₹1.5 lakh extra in tax savings |
| Rental income splitting | Lowers tax liability |
| Business income sharing | Prevents higher tax slab entry |
Steps to Form a HUF
- Draft a HUF deed listing family members.
- Get a separate PAN card for the HUF.
- Open a dedicated bank account.
- Transfer ancestral property or invest under the HUF.
Who Should Opt for a HUF?
- Business owners wanting to split income.
- Families with rental income.
- Individuals in the highest tax slab.
- Those with inherited wealth.
HUFs offer a simple yet powerful way to optimize taxes. If you have a family business or rental income, starting a HUF can help you save lakhs legally!