What are the features and advantages of HUF?
Advantages of Creating HUF:
- Just like other individuals, even HUF members are liable to pay taxes every year. …
- The head of a HUF has all the power to sign the relevant documents on behalf of other members in her/his family. …
- An adopted child may also become a member of the HUF.
What are the merits of HUF form of business organization?
Easy to Start: -Joint Hindu Family business is very easy to form. It comes into existence as per Hindu law. Family members become co-parceners in the firm by virtue of their birth in the family. Moreover no registration is required for a Joint Hindu Family firm respect of minimum or maximum members.
What special features can be associated with Karta in a joint Hindu family business?
Authority – In a joint family firm, only Karta has the implied authority to contract debts and pledge the credit and property of the firm for the ordinary purpose of the businesses of the firm. Secrecy – In Joint Hindu Family Business, all the decisions are taken by the ‘Karta‘ himself.
What is HUF business explain in detail?
HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. HUF is taxed separately from its members. … Buddhists, Jains, and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independent of its members.
What is the benefit of HUF account?
The income tax slab for HUF is same as that of an individual, with an exemption limit of Rs 2.5 lakh and qualifies for all the tax benefits under Section 80C, 80D, 80G and so on. It also enjoys exemptions under Section 54 and 54F with respect to capital gains.
Can husband and wife form HUF?
To create HUF, at least two coparceners are required either son or daughter. Therefore only husband and wife cannot create an HUF, unless the property has been received by a coparcener on partition or otherwise. However, there is no impediment to starting a new HUF by gift from family members.
Who are the members of Hindu undivided family business are called?
The Head of the Hindu undivided family business is known as karta. He is the eldest member of the family while other members are coparceners.
What are the two important features of an HUF?
Features of a HUF
- Formation: To begin a Hindu Undivided Family there must be a minimum of two related family members. …
- Liability: The liability of all the various co-parceners is only up to their share of the property or business. …
- Control: The entire control of the entity lies with the Karta.
Who becomes Karta in joint Hindu family?
The senior-most male member of the Joint Hindu Family is considered as the Karta of family and he has infinite powers and control over the business. But the main drawback is the unlimited liability associated with the position i.e. his personal assets can be used to payoff the debts, if need arises.
Who can be a Karta of joint Hindu family?
In a family consisting of the father and his children, father is the Karta when he dies his eldest son becomes the Karta. Thus in a joint family consisting of brothers the eldest brother is the Karta. It is open to the senior member to give up his right of Management. Then one junior to him can become the Karta.
Why is the joint Hindu family unique?
Joint Hindu Family Firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members. The business of Joint Hindu Family is controlled under the Hindu Law instead of Partnership Act.
Can we deposit cash in HUF account?
(3) My understanding about this issue is, you can deposit upto Rs. 300000 in to your HUF account and no tax liability will be there on HUF. (considering Rs. 200000 tax exemption limit and Rs.
How many types of joint are there in Hindu family business?
Here the liability of Karta is unlimited & rest all have liability as per their share in the business. Membership in business is acquired either by birth in family or marriage to a male member of the family. There are basically 2 types of joint Hindu family business: Mitakshara & Dayabhagha.
Who can operate HUF account?
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.