Asked by: Vojtech Liverovskyreligion and spirituality hinduism
How does Hindu undivided family work?
Last Updated: 29th January, 2020
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Also know, what does Hindu undivided family means?
The term 'Hindu Undivided Family' has not beendefined under the Income Tax Act. It is defined underthe Hindu Law as a family that consists of allpersons lineally descended from a common ancestor, including wivesand unmarried daughters. A HUF cannot be formed by a groupof people who do not constitute afamily.
Also Know, what is the benefit of HUF? The major advantage of creating a HinduUndivided Family Account is that the family gets an extra PANCard and can split the family income and thereby resulting in taxsaving and reducing the tax outgo. This is the major reason whyCA's advise their clients to create a HUF and save taxes ofupto Rs.
In respect to this, can we pay commission to HUF?
The insurance under HUF would belong to andbecome the assets of the HUF. However, PPF account in thename of HUF is no more permitted as clarified by theministry of finance in 2005. To claim deduction under section 80C,an HUF can contribute to the PPF account of its members andclaim a tax deduction.
Who comes under Hindu undivided family?
An HUF is a family which consistsof all persons lineally descended from a common ancestor,and also the wives and daughters of the male descendants. Itconsists of the karta, who is typically the eldest person orhead of the family, while other family membersare coparceners.