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Overview
Advantages
Disadvantages
Expert Advice
Documents Required
Steps for Creation of HUF
Why TaxSharks

List Documents For Company Registration

As experienced consultants for company registration, we at Setindiabiz understand the importance of documentation in ensuring a smooth and successful registration process for a Private Limited Company. To make it easier for our clients, we have compiled a table below listing all the necessary documents required for the incorporation process.

Advantages of Forming a Hindu Undivided Family (HUF)

Tax Benefits

One of the significant advantages of forming an HUF is the potential for tax benefits. HUFs have their own separate tax entity, and they can avail themselves of certain tax deductions and exemptions

Basic Tax Exemption Limit of Rs. 2,50,000.00
Section 80C 1,50,000.00
Sum of money received without consideration upto Rs. 50,000.

Pooling of Resources

HUF allows for the pooling of financial resources from various family members. This collective financial strength can be utilized for joint family investments, businesses, or other ventures.

Continuity of Family Wealth

The concept of HUF helps in preserving and passing on family wealth from one generation to the next. Assets held by the HUF are considered ancestral property, and they can be passed down to the next generation without attracting gift tax.

Succession Planning

HUF facilitates smooth succession planning by defining a clear lineage for inheritance. It provides a structured way for passing on property and assets to the next generation while maintaining family unity.

Legal Recognition

HUF enjoys legal recognition in India, and it has the right to own and acquire property in its name. This legal entity status can simplify various financial transactions and property dealings.

Expert Advice

It is recommended when you are having any ancestral or parental property which you have let out to earn Rental Income and being a Salaried Person your already fall under 20%-30% Tax Slab.

Disadvantages of Forming a Hindu Undivided Family (HUF)

Equal Rights in the Assets

One of the biggest disadvantages of the HUF is that all members have equal rights on the property. The common property or asset cannot be sold without the consent of all the members.

Closing a HUF is a complex process. Once the HUF is terminated, all the assets need to be distributed among all the members of HUF which can be quite difficult.

Documents Required

Following are the requisite HUF Registration Documents.

Identity Proof

Proof Of Residence

For Registered Office

Steps for Creation of HUF

Step 1: Drafting the HUF Deed

To initiate the creation of an HUF, the first crucial step involves drafting the HUF Deed. This formal document on a Stamp Paper, delineates the Karta (head of the family) and the Co-parceners or members of the HUF. The eldest male family member typically assumes the role of Karta. The HUF Deed also outlines the initial capital invested in the HUF.

Step 2: Application for HUF PAN Card

Obtaining a separate PAN (Permanent Account Number) for the HUF is imperative, as it signifies its distinct legal identity. Upon successful allotment of the PAN Card, the HUF can file separate tax returns, enabling it to claim tax benefits and deductions similar to those available to individuals

Step 3: Open HUF Bank Account

The last step is to open a Bank Account in the name of the HUF through which all the transactions will be made.

Why Taxsharks

TaxSharks is a idea introduced by like-minded professionals understanding the issues & problems faced by small, medium & large businesses. We are team of professionals including Chartered Accountants, Company Secreteries, Lawyers & Consultants, passionate to simplify the taxation & business laws. We aim at providing one on one expert assistance about all your queries assuring satisfaction.