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Primary Benefits of Maintaining an HUF Account

The benefits of maintaining an HUF account are mentioned below-

Rebates and Deductions

According to the IT Act, tax rebates and deductions can be availed under section 80C for HUF accounts.

Tax-Free Gifting

Gifts valued up to Rs 50,000 enjoy tax exemption. It allows tax benefits under sections 64(2) and 56(2).

Participation in Business Activities

A HUF can participate in various business activities, and the income generated shall be considered the HUF’S Income.

Income Tax Privileges

The HUF has the capacity to generate income, participate in business operations, and invest in various assets. Meanwhile, it retains the advantage of the basic exemption limit set at 2.5 lakhs.

Option for Investment

Equity-linked savings schemes (ELSS) are a tax-saving investment avenue that HUFs can explore and avail themselves of tax benefits of up to Rs. 1,50,000 under section 80C.

Residential Property without Tax

Multiple residential properties can be owned by Establishing HUF without incurring additional taxes.

Deductions in Life Insurance

HUFs can enjoy deductions enjoyed by individual taxpayers, like a deduction of Rs. 1,50,000 on specified investments and life insurance premiums under section 80C.

Pooling of Family Assets

HUF account enables the pooling of family assets. It facilitates centralized management and ensures the proper utilization of resources.

Business Ownership

Hindu Undivided Family can own and operate businesses. It allows for business expansion and diversification.

Income Splitting

HUFs can split income among family members. It reduces overall tax liability through lower tax slabs.

Wealth Management

HUF accounts facilitate efficient wealth management. Such accounts consolidate family assets and investments under a single entity.

Retirement Planning

HUFs can contribute to retirement funds and schemes. It ensures financial stability and security for family members.

Why Choose Taxeye for your HUF Account Registration Services?

  • We ensure that you will have a hassle-free experience
  • Stay compliant with the legal and Tax requirements
  • Get end-to-end guidance in each step of HUF Account Registration
  • Transparent Fee Structure with No Hidden Charges
  • 200+ HUF Filing Experts with Decades of Experience
  • 99.2% Client Retention Rate, Highest in the Trade

What is HUF, HUF Account, Karta & CO-Parceners?

Rooted in Hindu Law, the formation of HUF (Hindu Undivided Family) often takes place upon an individual’s marriage. An HUF account is a distinguished and acknowledged business entity according to the tax laws. HUF is a unique entity. Gaining insights into pivotal roles is of utmost importance. Hindu Undivided Family (HUF) is a group of lineal descendants with a common ancestor. The membership into a Hindu Undivided Family comes not through a contract but from your status. Generally, the seniormost male member of the family acts as Karta; if he passes away, his wife can become Karta. It is a Crucial role where he will manage the family affairs as well as representing the HUF as a Whole. All The “male” members of the family shall be referred to as coparceners; he shall have the right to demand a share of the family.

A Hindu coparcener includes the sons, grandsons, and great-grandsons of the Joint Family Property holder. The coparcener extends to four generations down the family hierarchy.

Rules Regarding HUF Account

  • HUF Accounts can be differentiated from regular savings bank accounts by considering these critical factors.
  • Common HUF corpus can be used by every member of the family to deposit their income.
  • Availability of tax benefits under various sections.
  • An agreement of every coparcener is required for the division of corpus.
  • Single-person authority is achieved through the participation of the entire family.
  • The Karta is responsible for maintaining books of records and proper accounts.  
  • HUFs can be represented in legal proceedings by the Karta or other authorized members. 
  • HUFs can invest in financial instruments such as mutual funds, bonds, stocks, etc. 

Criteria for the Formation of a HUF Account

  • HUF Account formation requires a family
  • HUF Formation can be followed by a marriage
  • HUF accounts can be formed by individuals belonging to Hindu, Sikh, Jain, and Buddhist communities
  • HUF account members can leverage various tax benefits under applicable sections. 

Welcome to TaxEye

How it Works?

STEP 1

Initial Consultation and Guidance

STEP 2

Documents Collection and Verification

STEP 3

Application Submission to Authorities

STEP 4

HUF Registration Confirmation and Support

Frequently Ask Questions

An HUF account is a financial unit formed by pooling the assets of the Hindu Undivided family. It also provides a distinct legal structure to the HUF.

A: Opening a HUF account involves providing the necessary documentation, including the HUF deed, PAN (Permanent Account Number) for the HUF, and KYC documents for the members. The account can be opened at most banks.

HUFs are taxed based on the applicable income tax slabs. The tax rates for HUFs are similar to those for individual taxpayers, with different slabs for different income ranges.

Yes, you can track the status of your HUF filing through your Taxeye dashboard. We provide real-time updates on the progress of your filing, ensuring transparency and peace of mind.

A: HUF stands for Hindu Undivided Family, a legal entity recognized for tax purposes in India. Taxeye provides insights into the concept of HUF, its formation, and the taxation principles that apply to it.

HUFs enjoy heavy HUF tax benefits such as separate taxation, exemptions, and deductions. Taxeye experts delve into these benefits, providing personalized strategies to help you maximize savings and minimize tax liabilities within the HUF framework.

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