Table of Contents
Can HUF give salary?
HUF can pay a salary to its members if they contribute to its functioning of the HUF. This salary expense can be deducted from the income of HUF.
Is income from HUF exempt?
Mr. A would be liable to pay income tax on the amount of salary received by him. However, the amount of INR 1 Lakhs received from the income of the HUF would be exempted in terms of provisions of section 10(2) of the Income Tax Act. Sr.
What is the exemption limit for HUF?
Rs 2.5 lakh
And being a separate entity, the HUF enjoys a basic tax exemption of Rs 2.5 lakh. So, imagine that you create an HUF consisting of you, your spouse and two children. In addition to income tax benefits you enjoy individually, you can also avail of an additional basic income tax exemption of Rs 2.5 lakh each year.
Can HUF pay salary to Karta?
Pay kartafor services: If the karta does not have a high income, the HUF can pay him a salary for his services. This salary will be taxed as his income and will be fully deductible from the HUF income.
How do you earn income from HUF?
How to create HUF Capital
- Gifts received at the time of marriage. Gifts received at the time of marriage of any member of the HUF are fully exempted from the levy of Income Tax.
- Ancestral property.
- Aggregate Value of Gifts is less than Rs.
- Gifts received from members of the HUF.
Can HUF claim 80c deduction for PPF?
However as far as making contribution and availing the tax benefits by HUF are concerned the same are regulated by the Income Tax Act and there is nothing in the income tax act prohibiting an HUF by claiming deduction under Section 80 C for contribution made by it to the PPF account of not only of any coparcener but …
What are the incomes not treated as family income under HUF?
As per section 64(2), income from the transfer of a self acquired asset, without adequate consideration or conversion of the same into joint family property, shall not be treated as the income of the HUF.
How is HUF income taxed?
For the sake of income tax, the HUF is considered as a separate entity and is therefore taxed separately. The income tax slab for HUF is same as that of an individual, with an exemption limit of Rs 2.5 lakh and qualifies for all the tax benefits under Section 80C, 80D, 80G and so on.
What are the exemptions available to a HUF under Income Tax Act?
A HUF is eligible for those exemptions that are available to a resident Indian who is not a senior citizen. Under the Income Tax Act, 1961, Hindu Undivided Family (HUF) is an entity, which has been given certain exemptions, quite similar to an individual.
Is gift received from a HUF taxable?
Although any gift received by the HUF from its members is non-taxable as per Section 56 of the Income Tax Act, 1961, the income accruing to the HUF from such a gift will be clubbed with the income of the member making the gift as per provisions of Section 64 of the Income Tax Act, 1961.
What happens to the HUF if there is no income?
The HUF continues to be assessed until its partition. Thus, once an income tax return is filed for the HUF, you have to continue filing the returns till the HUF is dissolved/partitioned, even if there is no income. Any claim for partition is also made to the assessing officer.
Can a HUF pay a salary to its members?
A HUF can pay a salary to its members for contributing to the functioning of the HUF which can then be claimed as a deductible expense from its income. However, there must be some justifiable contribution to the salary earning members to the working of the HUF & management of its affairs.