HUF a.k.a. Hindu Undivided family is a clause in India where the Hindu family can create a family unit, pool assets in it and then save a tax with it. HUF is taxed separately than the individual and thus it can help you to save more taxes.
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As this is the tax season here in India, people are finding ways to save more taxes. One of my collegue is using some illegal means to save more taxes and what not. But HUF is legal and thus it can help you to save some taxes which otherwise you have to pay. HUF has its own pan and the taxes are filed as a unit.
I will not get into detail about how HUF is formed as it is extensively available with a simple Google search. The question here is, it is worth it. Before answering that let's understand how you can save money using HUF.
For example you have a HUF and also you get a rent. That rent can be attached to the HUF and thus you can claim the tax through it. Otherwise, you have to pay a good amount of tax for that rented property if the rent is attached to your income. The only thing is that all the members of the HUF have equal rights of the property.
Now if you don't have a rented property than HUF is of no use, because then you are actually not getting a rent in the name of HUF. If there is a business, then again there will be tax liability according to the business and thus HUF is of no use.
So if you have multiple properties which is generating good rent, then having a HUF makes sense. Otherwise it is not worth it.
