We have heard and used the term HUF in income tax; today let’s understand what exactly the HUF is.
HUF is simply ‘Hindu Undivided Family’. Though it has not been specifically defined in the income tax act, the act recognizes the HUF as a separate taxable entity (just like an individual, a company or a firm). HUF can file an Income Tax Return. HUF can be formed by a group of individuals, who are descendants from a common male ancestor, of the same Hindu family.
The senior most male member of the HUF is called ‘karta’. The family of the karta is members of the HUF – his wife, his children, their wives and their children, including unmarried daughters are members of HUF. Male member of the HUF are called co-parceners and a co-parcener can demand partition of the HUF. Its important to know about co-parceners because the HUF can only be taxed as a separate entity if it consists of at least 2 co-parceners.
That is briefly what an HUF is. Tell us if you would like to know more about HUF and its taxation. We can then address your queries. You can comment here or write to us firstname.lastname@example.org
You can also read our extensive guide on formation of HUF for tax benefits.
Have a great weekend ahead 🙂