Hi,
Can anyone tell me what are the "Tax benefit" of forming a HUF.
A. In case of Individual having salary income.
B. In case of Individual having income from business/profession.
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Benefit of forming huf
Replies (2)
Huf can do business not involving any personal,individual expertise( eg.Lawyer ). It can do trading business of products, shares etc.Up to 250000 of Total income, you can get benefit of not paying tax. A. IN CASE OF SALARY - Huf cannot be formed. If there is other income like share trading business, then you can invest in the name of huf and divert income. B.IN CASE OF BUSINESS - Any business not involving personal , professional individual expertise.
HUF is a separate entity from the point of view of income tax which enjoys tax benefits under sections 80C, 80D etc. and any income upto Rs. 2 lac is not chargeable to tax for an HUF.
HUF cannot have salary income though its Karta may have. HUF can do separate business or can have ancestral property.
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