Tax implication of

participation of HUF
Introduction of HUF

 HUF means Hindu Undivided Family. You can save taxes by creating a family
unit and pooling in assets to form an HUF. HUF is taxed separately from its
members. A Hindu family can come together and form a HUF. Buddhists,
Jains, and Sikhs can also form an HUF.
 An HUF can run its own business to generate income. It can also invest in
shares and Mutual Funds.
Income tax filing

 Income tax filing refers to the process through which an individual, business,
or entity provides details of their income, deductions, and other relevant
financial information to the tax authorities.
 Filing income tax returns serves several purposes, including:-
 Legal Compliance.
 Financial Transparency.
 Access to Financial Services.
 Tax Planning.
 Government revenue.
Sources of income

 Through any Business.

 Investing in Shares and Mutual Funds.
 Investing in Real Estate.
 Through Rental Income.
 Various other sources.
Tax benefits and deductions

 Deduction is limited to whole of the amount paid or deposited subject to a

maximum of Rs. 1,50,000.
 Tax benefits and deductions refer to provisions in tax laws that allow
individuals and businesses to reduce their taxable income, thereby lowering
their overall tax liability.
 Reduced taxable income helps you save and invest money in other areas.
 Various types of tax deductions in India:-
 Public Provident Fund (PPF).
 Life Insurance Premiums.
 National savings certificate(NSC).
 Bank Fixed Deposits (FDs).
 Retirement Savings Plan.
 Examples of deduction applicable to HUF (Section 80C ,80D):-
 Section 80C deduction-
 Life Insurance Premium (Section 80C).
 Public Provident Fund (PPF).
 Equity-Linked Saving Scheme (ELSS).
 Employee provident fund.
 Section 80D deductions-
 Health insurance premiums.
 Mediclaim policies.