CA Sagar Kakkad
WHY AN HUF?
Because you can save up to INR 5 Million in Present Value Terms !!
Government increases the basic exemption limit by average INR 25 k per year and deductions by average INR 5 k per year with no other
significant change in tax rates or slabs (which is quite conservative)
Inflation / Post tax rate of return on investment is 7% p.a. for discounting purpose.
You are able to utilize the full potential of savings available through HUF.
HOW IS IT POSSIBLE?
o An HUF is treated as a separate entity under the Income Tax Act, 1961;
o Basic Exemption Limit of INR 200 k;
o Benefit of slab rate of tax of 10% on incremental income up to INR 500 k and 20% on further incremental income up to INR 1 Million
o Deduction under section 80C of the Act of INR 150 k for certain investments in the name of its members (LIP, DAP, PPF, ULIP);
o Deduction under section 80D of the Act of INR 15 k for insurance on health of its members;
o Deduction under section 80TTA of the Act of INR 10 k for interest on savings bank account;