Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

CAN THE HUF SUN RISE WITHOUT A SON?

Courts have held that two male members are a must to constitute an HUF is a myth that must be dispelled!

Under the Direct Tax Laws in our country, a Hindu Undivided Family (HUF) has been granted the status of an independent tax entity. Thus, an HUF has assumed a useful role in personal tax planning.

No doubt, it is true that to constitute an HUF, there should be atleast two members and there cannot be an HUF consisting of a single member, male or female. However, the myth or misconception, that there must be atleast two male members in the family to constitute an HUF as a taxable unit needs to be dispelled.

Courts and Tribunals have categorically held that such profit or income arising from any properties held by an HUF cannot be taxed in the hands of the individual Karta on the ground that he does not have a son in the family. It would be interesting to review the ratio and reasoning of some landmark judicial pronouncements on the subject.

As held by the Supreme Court in the case of ‘Gowli Buddanna vs. CIT’ 60 ITR 293(SC), under Hindu Law, a joint family may consist of a single male member and the Income-tax Act also does not indicate that the HUF as an assessable entity must consist of atleast two male members. (more…)

BANK ON TERM DEPOSITS FOR AVAILING TAX SAVING

Investing in the ‘Tax Saving Deposit Scheme’ can be a great choice for NRIs & HUFs who cannot invest in PPF!

              The Finance Act, 2006 enlarged the scope of investments and allocations eligible for deduction under Section 80C of the Income-tax Act through the inclusion of ‘a term deposit for a period of 5 years or more in accordance with a scheme framed by the Central Government.’  Pursuant to this, the ‘Bank Term Deposit Scheme, 2006’ was announced vide Notification No.203/2006 dated 28th July, 2006. (more…)

TAX SAVING VIA HUF

Granted the Status of an Independent Tax Entity

HUF has a Key Role in Personal Tax Planning

Under the Direct Tax Laws in our country, a Hindu Undivided Family (HUF) has been granted the status of an independent tax entity. Thus, an HUF has assumed a useful role in personal tax planning. (more…)

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