Active Stocks
Mon Apr 15 2024 15:59:36
  1. Tata Steel share price
  2. 160.90 -1.59%
  1. ITC share price
  2. 425.90 -0.98%
  1. State Bank Of India share price
  2. 757.75 -1.17%
  1. ICICI Bank share price
  2. 1,078.80 -2.30%
  1. NTPC share price
  2. 361.35 -0.08%
Business News/ Money / Calculators/  What is Hindu Undivided Family and how is it taxed?
BackBack

What is Hindu Undivided Family and how is it taxed?

An HUF is taxed on the same slab rates that are applicable to an individual income tax assessee

Under Income-tax Act, an HUF is considered a “person” and is treated as a separate entity for the purpose of tax assessment. Photo: iStockPremium
Under Income-tax Act, an HUF is considered a “person” and is treated as a separate entity for the purpose of tax assessment. Photo: iStock

An HUF is a family which consists of all persons lineally descended from a common ancestor, and also the wives and daughters of the male descendants. It consists of the karta, who is typically the eldest person or head of the family, while other family members are coparceners. The karta manages the day-to-day affairs of the HUF. Children are coparceners of their father’s HUF. Once a daughter gets married, she becomes a member of her husband’s HUF, while continuing to be a coparcener of her father’s HUF. Even Jain, Buddhist and Sikh families can have HUFs.

Under section 2(31) of the Income-tax Act, 1961, an HUF is considered a “person" and, therefore, is treated as a separate entity for the purpose of tax assessment. Often families that own ancestral properties and businesses obtain a separate Permanent Account Number (PAN) in the name of the HUF. This is done so that the incomes earned from the assets and businesses owned by the HUF are assessed separately, which also brings down the family’s tax liability. An HUF is taxed on the same slab rates that are applicable to an individual income tax assessee.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 27 Jun 2018, 10:43 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App