HUF- Hindu Undivided Family.
when compare to normal individual trading and Demat account, HUF trading account getting tax benefits every member of the family can deposit their income in the common corpus.Tax benefits on deposits under various sections.according to income tax act tax deductions can be availed under sections 80C,88 and 80L for HUF account
HUF?
HUF - Hindu Undivided Family, it is a family of Hindus. like Jains, Buddhists and Sikhs…,
HUF is a legal term related to the Hindu Marriage Act. Due to the development of Indian Legal System, of late, the female members are also given the right of share to the property in the HUF. the expression HUF finds reference in the provisions of the income tax act but the expression is not defined in the act.
The only exceptions are in the case of an adoption or a marriage when a stranger may become a HUF member.
Key Aspects:
Head of the family (Kartha) takes all decision regarding financial and economical aspects of family.
All members live under one roof.
Share the same Kitchen
Three generations living together (though often two or more brothers live together, or Father and Son live together or all the descendants of male live together).
A common place of Worship
All decisions are made by the male head of the family- Patrilineal, Patriarchal.
No division of property until the death of the Karta (head of family or older male person).
Income earned by the HUF and expenses incurred by the HUF are of the whole family and not of any specific individual.All Incomes are also taxed in the hands of the HUF and not any specific individual.
Required Documents:-
1.Duly filled Trading/Trading & Demat/Commodity form with photograph of Karta affixed and signed across.
2.PAN Card copy of the HUF.
3.PAN Card copy & Address Proof of Karta.
4.Bank Passbook/Bank Statement of HUF indicating its existence.
5.Declaration to be given by Karta & all major co parceners of the HUF.
6.HUF Declaration for Demat account.
Advantage: Tax benefits on various sections, Gifts collected up to a worth of Rs 50,000 will be tax free and Every member of the family can deposit their income in the common corpus
HUF account is Hindu Undivided Family . The major advantage of opening this type of Trading/Demat account is one can save taxes.All the family members are part of it.
HUF - Hindu Undivided family and it major benefit is tax saving. All the members of the family are the part of this account.
Documents required:
*PAN Card & address proof of HUF and Karta.
* Declaration from all the members of HUF
*Residency & ID proof of Karta.
HUF mean Hindu Undivided Family.
HUF stands for Hindu undivided family… The account is managed by a karta who is a male member of the family and other members of the family are termed as Co-parceners…
The main advantage of opening HUF account is Tax liability can be reduced
There is exemption of tax for the gift collected worth up to 50000 and There are some other benefits also.
HUF is Hindu Undivided Family.All the family members are part of it and the head(who is male member of family) is the Karta.
The main advantage of opening trading account are as below:
•Every member of the family can deposit their income in the common corpus.
•Single person’s authority while participation from entire family.
•Tax benefits on deposits under various sections. According to IT act, tax rebates and deductions can be availed under sections 80C, 88 and 80L for HUF account.
•Corpus can be used for investment in tax free money instruments.
•Corpus can be divided only on agreement of every coparcener of the family.
Documents required to open trading account as HUF
1.Duly filled Account Opening Form with photograph of Karta affixed and signed across. In case of NSDL demat a/c should be opened in name of Karta.
2.Proof Of Address and PAN card copy in the name of Karta.
3.PAN Card and bank passbook/bank statement of HUF indicating its existence.
4.Dp client Agreement duly signed by the a/c holder. Bank statement should be of the recent quarter and contain the logo or seal of the bank. It should also be self-attested by the Karta.
5.Declaration by the Karta giving details of the family members of the HUF with their names, date of birth, sex and relationship with the Karta. The declaration letter should be either attested by a Notary Public or by the bank.
6.Additional financial details duly filled
7.All the KYC docs are to be self-attested.
8.The Karta should sign the AOF and other documents under the stamp of HUF
9.HUF account cannot be opened with joint holders.
10.No nomination can be made in HUF account
11.Cancelled cheque with clients name preprinted on the same is required. In case of a/c opening if clients name is not visible on cancelled cheque then we either require bank statement/ bank passbook with same bank a/c number reflecting on the same
12.Karta should sign the Account Opening Form and other documents under the stamp of HUF.
13.All KYC documents to be attested by the Karta.
Hindu Undivided Family (HUF):-
HUF is a family with husband, wife and children (and children’s spouses if any) living together. The property owned by this family will be through lineal ascendants or any ancestors. There are a set of laws that govern property ownership, marriages, taxation etc for a legally declared HUF. IT department of India has a format of taxation for a HUF; tax benefits can be availed from this format.
Account Opening Documents (HUF)
Bank account should be in the name of HUF
Photograph of Karta
Proof of identity (same as stated for Individuals)
Proof of address of the Karta (same as stated for Individuals)
Pan number in HUF's name
Proof of Bank Account: Any one of the following may be submitted
Copy of Bank Statement
Copy of first page of the Bank Pass Book.
A canceled cheque (only if the account holder's name is printed on it)
List of coparceners in the HUF, along with an authorization given to the Karta by the said coparceners to open and operate the DP and Trading accounts.
DP should be HUF DP A/c.
referred from http://www.thinkrupee.com/
HUF full form is Hindu Undivided Family. The advantages of this account is one can save taxes and family members can be a part of this account.
HUF is Hindu undivided family account,This account is maintained by one of the main family member(kartha) & other family members can be added in this account , the main benefit of HUF account is there is a Tax exemption of 50000 rs & all the other members of the family can trade togeter in 1 single HUF account
1.HUF- Hindu Undivided Family.
HUF is a family with husband, wife and children (and children’s spouses if any) living together.
The property owned by this family will be through lineal ascendants or any ancestors.
There are a set of laws that govern property ownership, marriages, taxation etc for a legally declared HUF.
IT department of India has a format of taxation for a HUF; tax benefits can be availed from this format.
Features of HUF account:-
Tax benefits on a HUF account:-
Documents required for opening HUF account:-
Important
<p>1. Karta should sign the Account Opening Form and other documents under the stamp of HUF.</p>
<p>2. All KYC documents to be attested by the Karta.</p>
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As the name says Hindu Undivided Family (HUF) is referred to Hindu living together. The head of the family is called the Karta. IT department of India regards them as one taxable unit and offers many benifits. Karta of a HUF is the senior most male member of the family and in financial terms he can also be called manager of the family. In this account a corpus is created where every family member can pool their income. The corpus will be handled by or authorized to handle by Karta (head of the family). Signature of karta will be required for every transaction from the bank. These accounts are similar to individual saving bank accounts; there will be various tax benefits that are available for an individual’s account while the income of members is being pooled in HUF account.
Advantages of opening a trading/demat account which is a HUF . Under the Income Tax, an HUF is a separate entity for the purpose of income tax return. HUF will aslo gain from the tax slab structure of computing income tax. According to IT act, tax rebates and deductions can be availed under sections 80C, 88 and 80L for HUF account.
Documents required:- 1.Duly filled Trading/Trading &; Demat/Commodity form with photograph of Karta affixed and signed across. 2. Pan Card copy of the HUF. 3. Bank Passbook/Bank Statement of HUF indicating its existence. 4. Pan Card copy &; Address Proof of Karta. 5. Declaration to be given by Karta & all major co parceners of the HUF. 6. HUF Declaration for Demat account. Karta should sign the Account Opening Form and other documents under the stamp of HUF. All KYC documents to be attested by the Karta.
HUF means a Hindu undivided family where as a male member known as Karta is appointed by a family who can manage a securities /investment/open an demat account on behalf of whole family
Advantages are
The investment made by whole family can be shared among them like profits gained/dividend earned and get tax exemptions
HUF account means Hindu undivided family.
The advatages of opening a HUF account are.
2.Every member is the family can pool in money to the common Corpus
Hindu Undivided Family.
Huf is a family with husband,wife & children living together.The HUF is an account which acknowledges that the particular hindu family is undivided in terms of property, profit or loss in the business etc. It implies for everyone in the family who were at the time of creation of the account and also who were not i.e, people who get married to the family. It does not end with a particular generation and continues forever
HUF stands for Hindu Undivided Family. It is a demat account opened for managing securities of a family. The account is managed by a ‘Karta’ who is a male member of the family and other members of the family are termed as ‘Co-parceners’. Karta manages the HUF account on behalf of the Co-parceners.
ADVANTAGES-
Under the Income Tax Act, an HUF is a separate entity for the purpose of income tax return.HUF will also gain from the tax slab structure of computing income tax. In the case of HUF, shares can be transferred in the name of the Karta .Tax benefits on deposits under various section . Every member of the family can deposit their income in the common corpus.
HUF is a creation of law so it is your right by birth and it cannot be created by an agreement between two parties. So any individual who is covered by Hindu personal law that is Hindu, Sikh, Jain or Buddhist can create an HUF account. When we talk about creating HUF it is only for the benefit of tax planning. As soon as Hindu individual is married he can open an account in the name of his HUF and when the child is born, he will automatically become member of his fathers HUF. Under income tax, HUF is treated as a separate person. So you can divide your income in two parts. Can a salaried individual divide his income? The answer is no. However, suppose somebody has income and he is planning to create some additional income, for example somebody has income of Rs 10 lakh and he is paying tax on that and he is planning to do some additional business where he expects to earn additional Rs 5 lakh. Now because he has already crossed the limit of Rs 10 lakh, so on additional Rs 5 lakh he will have to pay 30 percent tax as per slab rate applicable. Now suppose he creates an HUF entity and does the business in that entity, then this Rs 5 lakh is a separate income, so he has choice to invest under Section 80 C. Suppose he invests Rs 1 lakh, then the remaining Rs 4 lakh is the income for tax but again there is threshold limit, where on the first Rs 2 lakh there is no tax. So he will pay tax only on Rs 2 lakh and that too only 10 percent because slab rate is applicable. Here if he is dividing income on that Rs 5 lakh; after claiming reduction and claiming the basic exempt limit, he is paying only Rs 20,000 tax plus education cess. Whereas, if that Rs 5 lakh was his individual income in addition to that Rs 10 lakh, he would be paying 30 percent that is Rs 1.5 lakh. In this way the income can be bifurcated, can be divided in two parts. But there the provision of clubbing is also applicable and you cannot transfer your own income, only if you are doing a separate business from other sources you can do this.
HUF (Hindu Undivided Family) …
There are couple of reasons to open HUF Trading and Demat account and not the Individual one.
Most Important and essential one would be TAX.
HUF is entitled as different entity, so if an INDIVIDUAL who is already into higher Tax brackets has to pay tax on this trading P&L also, but He/She belongs to HUF background, Can apply as NON Individual and Get the Lowest Bracket as a Different Entity. TAX slabs are as Individuals.
HUF stands for Hindu Undivided Family. It is a demat account opened for managing securities of a
family. The account is managed by a ‘Karta’ who is a male member of the family and other members of
the family are termed as ‘Co-parceners’. Karta manages the HUF account on behalf of the Co-parceners.
HUF account can be opened in the name of the HUF entity as it appears on the HUF PAN card such as A B C & SONS HUF, Existing Karta, Deceased Karta. In HUF they can get Rs.50000 of tax benefit.
HUF - Hindu undivided Family - Trading & Demat account for HUF can be opened for those who provide the following :
People usually create HUF accounts to gain tax benefits. Apart the usual excemptions of 2 lakhs + 1 Lakh, the HUF have other property and gift related tax benefits.
HUF - Hindu Undivided Family. Advantage of opening a HUF account is for tax savings for the family members where the head of the family will be either father or husband. Tax savings up to 50,000/- is another advantage.
HUF trading account can be opened but there is no option for a HUF demat, demat will be in the name of the family head either father or husband. However the same person (father /husband) can also hold an Individual demat too.
Main benefits of HUF accounts is to save the dual taxation . there will be only person(KARTA) who has to pay tax in hindu undivided family . and the karta gets a tax benefit of Rs. 50000 . they can trade like a family business other than karta no body has to worry for tax .