How HUF can help you save taxes

In continuation to my previous article in the series “How HUF can help you save Taxes”, let us understand in this article, how forming an HUF can help you save taxes.

If you look at the number of taxpayers constantly looking out for ways and means to save taxes and maximise their savings, you will find there are plenty. In fact, in their quest to save more taxes, taxpayers often end up investing in financial products which neither suit their risk profile nor aligned to their financial goals. And many a times, these investments are also done without a thorough research and analysis. So, does creating an HUF makes sense in terms of reduced tax liability and more savings? Well, the answer is yes provided it is done within the boundaries of our legal framework. Let us understand in detail:

As I have briefly explained in the first part of this article series, your HUF commands an independent status with respect to tax framework. What it means is like it enjoys most of the benefits under taxation rules what applies to you as an individual tax payer, like it has its own PAN, the benefit of Income Tax Slabs like basic exemption limit and different slab rates based on your income level apart from the 80C deductions, all applies similarly the way it applies to you.