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TAX PLANNING THROUGH HUF By SUBHASH LAKHOTIA Tax & Investment Consultant Tax Guru – CNBC Awaaz. Lakhotia College of Taxation & Management S-228, Greater Kailash Part-2, New Delhi-110048 Ph. 011-29215434, 29215420 E-mail: firstname.lastname@example.org Website: www.lakhotiacollege.com.
Lakhotia College of Taxation & Management
S-228, Greater Kailash Part-2, New Delhi-110048
Ph. 011-29215434, 29215420
1(1). Tax Saving a reality with HUF.
A. Survivorship principle.
B. Partition of HUF.
C. Special Gift by the father to the HUF.
D. Special Gift to HUF pot.
1.Separate exemption limit under Income-tax Law of Rs. 1,60,000
2. Separate deduction u/s 80G, etc.
5. Separate partnership share.
6. Salary to Karta /Member,
7. No T.D.S. on Interest.
8. Separate Income-tax Deduction on Interest for self occupied House Property
(a) Primary Market
(b) Secondary Market
On and from the commencement of the Hindu Succession (Amendment) Act, 2005 in a Joint Hindu Family governed by the Mitakshara law, the daughter of a coparcener shall :-
(a) by birth become a coparcener in her own right in the same manner as the son;
(b) have the same rights in the coparcenary
property as she would have had if she had been a son;
(c) be subject to the same liabilities in respect of the said coparcenary property as that of a son,
- New Section 6 of the Hindu Succession Act
The Partition of HUF can be:-
1. Partial Partition
2. Full Partition
(i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition; or
(ii) where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition;
CGT v. P. Hanumanthappa 68 ITR 363,
K.P. Gupta v. CIT 233 ITR 456
As per section 64(2) a gift by a member of a Hindu Undivided Family after 31-12-1969 would attract Clubbing of Income in the hands of the member and as such the income from the converted property shall be deemed to arise to the individual & not to the family.
(a) Son is not necessary to constitute HUF under Mitakshara law -Gowali Buddanna v. CIT (1966) 60 ITR 293 (SC).
(b) Unequal partition of HUF - No gift -CIT v. NSG chettiar 82 ITR 599 (SC)
(c) Father could form the HUF of son. Intention in Deed is important - MPP Chettiarv. CIT (1975) 99 ITR 1 (SC).
(d) HUF with husband and wife only - Prem Kumar v. CIT 121 ITR 347 (Allahabad H.C.).
(e) Remuneration to karta of HUF can be followed -
J. K. Baldeo Sahaiv. CIT 63 ITR 238 (SC).