Save on tax - Create HUF
The budget for 2020 has made significant changes. Dividend distribution tax has been abolished & the dividend income from shares and mutual funds is now taxable in the hands of recipient. We had advised our readers in 2017 to form a HUF. Now the reason for making it has become stronger. We once again introduce the concept of HUF and explain the process of creating an HUF along with the benefits. · What is a HUF? · HUF stands for Hindu Undivided Family. A HUF is automatically formed when a Hindu wedding takes place, although the ‘Hindu’ word here has a much wider connotation and includes Sikhs, Jains and Buddhists. A HUF can be officially created after marriage. The HUF consists of all members of the family and is initially composed of the couple & later expands to include any children. Typically, the eldest member of the family is desig...