Sage-Tips

What are the difficulties faced in Hindu undivided family form of Organisation?

Demerits of Joint Hindu Family Business: Limited Resources: The capital is limited only up to the resources of one family. No outside members other than family members can be introduced to the HUF. Thus the joint Hindu family business faces the problem of limited capital as it depends mainly on ancestral property.

Can HUF earn professional income?

Hello, Even if you create a HUF, professional income, and the rental income would be taxable in your individuals’ name only. And also a HUF cannot have salary income. Since professional income would depend upon your personal skills & abilities and the rental income would be charged in individuals hands as per sec.

Can HUF be partner?

A Hindu undivided family directly or indirectly cannot become a partner of a firm because the firm is an association of individuals. Under Hindu law, not all members of the joint family, hut only such o its members as have, in fact, entered into partnership with the stranger, become partners.

What are the advantages of forming an HUF?

Forming an HUF, obtaining a separate PAN for Tax purposes and filing a separate return has its own advantages. 1) It is beneficial to form an HUF when there is jointly owned/ inherited property. This HUF will last till the coparceners do not opt for the division of the property.

Is HUF a distinct entity for tax purposes?

Naturally, HUF is treated as a distinct entity for tax purposes. HUF need to have a separate PAN card and need to file separate IT returns. One of the major benefits of the Hindu Undivided Family is that it is considered a separate legal entity. This entitles HUF to obtain a separate PAN card and bank accounts in the name of the HUF.

What are the rules and regulations to follow for HUF?

There are certain rules and regulations to be followed by HUF. One of such rules is individual and separate PAN for HUF, using which the member can file their returns. However, most of the people are not aware of the benefits given to a Hindu Undivided Family.

How to pay tax after building a HUF?

After building the HUF, the members falling under HUF will not have to pay tax individually. As the new HUF PAN card is created, the family can start paying its taxes individually.

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