'You Can Use Hindu Undivided Family To Plan And Save Taxes...' Here's What Zerodha's Nithin Kamath Says
The CEO of Zerodha also shared a video and a blog post, offering detailed insights into utilising the Hindu Undivided Family (HUF) structure for tax planning and savings
Nithin Kamath, the co-founder and CEO of Zerodha, emphasised the advantages of the Hindu Undivided Family (HUF) structure—a distinctive legal and tax entity tailored for Hindu families in India. On Wednesday, he underscored the significance of this entity in enabling citizens to avail tax-saving opportunities while navigating the country's tax regulations.
“A friend was asking me about taxation for Hindu Undivided Families (HUF). If you're married and a Hindu, you can use a HUF to plan and save your taxes. HUF is treated as a separate entity, so all these deductions will apply separately to HUF along with the individual deductions. So, transferring any property yielding rental income to the HUF, opening a Demat account in the HUF name, transferring money to the HUF bank account, accepting gifts, etc.,” Kamath wrote in one of his posts on X (formerly Twitter).
A friend was asking me about taxation for Hindu Undivided Families (HUF).
— Nithin Kamath (@Nithin0dha) March 27, 2024
If you're married and a Hindu, you can use a HUF to plan and save your taxes. HUF is treated as a separate entity, so all these deductions will apply separately to HUF along with the individual…
According to a report in Business Standard, the Hindu Undivided Family (HUF) is considered a legal entity, classified as a "person" under section 2(31) of the Income-tax Act, 1961. This allows for assessment under the Act, and each HUF is assigned its own Permanent Account Number (PAN) and is responsible for filing tax returns independently of its members. Interestingly, while Jain and Sikh families are not bound by Hindu law, they, too, have the option to establish HUFs.
The CEO of Zerodha also shared a video and a blog post, offering detailed insights into utilising the Hindu Undivided Family (HUF) structure for tax planning and savings in the comment section of his post.
Kamath’s tweet attracted much attention from his followers, prompting them to comment and like the post. “I have always suggested that any Hindu who marries, should create an HUF on the very same day. It is a common misimpression that a person needs to be blessed with a son to be able to form an HUF. Moreover, people following the religion of Sikhism, Jainism and Buddhism are also eligible for the benefit of HUF,” wrote one of the X users.
“Say goodbye to tax woes and hello to financial freedom with HUF! Married Hindus, take note: HUF isn't just a tax-saving strategy, it's a game-changer. By leveraging its benefits, you can take control of your finances and secure a brighter future,” added another user.
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