Clubbing of Income: Section 60 to Section 64 of Income Tax.
The Hindu Undivided Family (HUF) structure provides a distinct advantage for Hindu families in India seeking effective tax planning and operational flexibility. Registering an HUF as a separate legal entity allows families to engage in independent business activities while potentially lowering their tax liabilities. This blog explores how a husband, wife, and HUF can operate separate businesses, the advantages of such an arrangement, and the conditions under which the Income Tax Department may apply clubbing provisions. What is an HUF? An HUF is a legally recognized entity comprising members of a family who share a common lineage. It is managed by the head of the family, called the Karta, who oversees its financial and operational matters. The Karta may be male or female, as per the amendments to the Hindu Succession Act in 2005. To form an HUF, the family must include more than just a husband and wife—it requires at least one child or another direct descendant. Once established,...