Everyone wants to save Taxes and when taxpayers asks the question that How do we save our taxes after claiming all the eligible deductions ??
The quick answer that comes to our mind is that Do you have an HUF?
Lets see what is an HUF and how does it help to save taxes
HUF stands for Hindu Undivided Family
If you are a married Hindu, Sikh, Jain living with family you can form an HUF. In India HUF is the unique tax Planning tool which helps to save lakhs of taxes every year
Pre requisites for an HUF:
1. Hindu, Sikh and Jain Family
2. You should be married
3. Family should be undivided that is husband, wife, children if any should be living together
If these conditions are met then you are eligible to form an HUF
What are the benefits of an HUF?
1. HUF is treated as a separate legal entity under the LAW
2. It has its own PAN, Bank account.
3. Income Tax rates of an individual are applicable to HUF
4. First Income of Rs. 2.50 Lakhs is exempt from taxes
5. HUF can claim tax deductions similar to an individual
6. HUF can make investments in its own name and earn income on the same
Hence It is highly recommended and beneficial tool in saving taxes for eligible families.