HUF Related
arijit
(Querist) 27 November 2009
This query is : Resolved
Dear Sir,
First of all, can anybody please tell me what are the different ways in which funds can be infused in a H.U.F?
Secondly, can a salaried individual, who is also the KARTA of the HUF infuse his part of his salary in the HUF? If so, what are the different tax benefits available in this case?
A V Vishal
(Expert) 27 November 2009
Under the Income Tax Act, an HUF is a separate entity for the purposeof income tax return.
The same tax slabs are applicable to HUF as to individual assessee.
You can not transfer your own assets/money into HUF.
If you have ancestral property and earning some income from this property, then it is better to transfer this asset to HUF and save tax up to exemption limit applicable to individual.
You can transfer the money received on sale of ancestral property /assets into your HUF.
The income from property of HUF can be further invested in instruments such as shares, mutual funds, etc. and will be assessed under HUF.
Existence of property or multiple members is not a pre-requisite to create HUF. A family which does not own any property may still have the character of Hindu joint family. This jointness is understood in terms of faith and food. This is because as a Hindu is born as a member of the joint family.
Any gifts received by the members of HUF (birthday, marriage, etc.) can be treated as assets of HUF.
The HUF is taxable as separate person under income tax hence one can save tax from basic exemption of Rs. 1.6 lakh. HUF will also gain from the tax slab structure of computing income tax.
Raj Kumar Makkad
(Expert) 28 November 2009
I agree with the detailed opinion og vishal.
arijit
(Querist) 09 December 2009
Thanks U
Vineet
(Expert) 09 December 2009
You can very well throw your personal asets in HUF stock but the Income Tax Act will not recognise the same.
Even if you infuse your salary income into HUF corpus, the same continues to be taxed in your hand and any further income arising out of these funds shall be taxed in your hand only.
