Ganesha Special Hindu Mythological Information Site Of Pictures,Online Worship Of Gods,Saints,Greeting-Cards & Audio
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Ganesha Special Hindu Mythological Information Site Of Pictures,Online Worship Of Gods,Saints,Greeting-Cards & Audio |
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Hindu Schools Of Laws Tax Benefits Important Points Information HUF comes under the Hindu Act.Under this act the Hindus (including Sikh,Jain,Buddhist),have a privilege to have a separate file to settle their family tax issues which is to be accounted by the senior male person(Karta) of the family. In many properties transactions,the status is declared as Hindu Undivided Family ie HUF.But there are certain legal requirements to determine the HUF status and the main aspects which need to be taken into consideration, in saving tax through HUF status are mentioned here.
The Hindus are covered by two schools of law, namely Mitakshara and Dayabhagh,while some other systems are also followed in South India. The West Bengal and Assam follow the Dayabhagh system whereas the majority follow the Mitakshara School of Hindu Law. The Mitakshara School of Hindu Law is based on the survivorship principle in the matter of devolution of the ancestral or HUF property, in contrast to the principle of succession which applies to the individual property of a Hindu. Secondly,till the Hindu family remains joint,no member of the HUF,can have a specific share in the HUF property. However on partition of HUF,the share of a member is decided. In another aspect,if the property of an HUF is partitioned amongst its members as per the HUF law, then the member getting the property will be said to hold it as HUF and not his indivisual property,subject to there is more than one member in the family. Also, if any addition is made to a partitioned HUF property, then the addition made the property also gets the status of HUF property. It must be noted that the property received by inheritance under the Hindu Succession Act,is in truth only the individual property of the person inheriting it and does not have the HUF status property.
The HUF status for a Hindu,assumes importance because of the tax benefits associated with the income tax and wealth tax laws.As per the laws, an individual having personal income and HUF income,would be entitled for an exemption in his individual as well as the HUF income. Also, he would be eligible for a further tax deduction or exemption,under Section 80C in respect of LIC premium, PPF contribution, NSC, etc., both on individual and HUF income separately. Under the Wealth Tax Act, 1957 ,separate exemptions are available for individual and HUF properties. Under HUF status, immovable property,jewellery and motorcars get extra exemption under Wealth Tax Act as well. Under Section 171 of the Income Tax Act,partial partition of an HUF is not recognized in law.Hence the important aspect of Income Tax Act, 1961 to be borne in mind is that,only a complete partition of the HUF is permitted.
he senior male person,who is accountable,called as "Karta" of the HUF, is entitled to operate the bank transactions. He may, authorise the other major members of the family to operate the HUF. The bank account should be in the name of either the HUF or in the name of the Karta by specifically declaring that the account is that of the HUF only. If a person wants to transfer some property by Will to the members of his family, he can transfer the same for the specific purpose of the HUF of his son or sons so as to constitute the amounts so transferred through will or so gifted by will as the HUF property of the son(s) concerned.HUF gives a good benefit in income tax and wealth tax.
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