Great content! Can Zerodha please put up some content about how to start a business? Getting the company incorporated, GST and all that stuff. Will be really helpful to a lot of budding entrepreneurs who are scrambling for content right now.
Tw questions on using HUF money 1. Can HUF money be used by Karta, Coparner and members for international travel like international flight tickets. If Yes then how do we declare and/or claim for exemptions in tax as where the amount has been used? 2. Also can HUF money be used by child/member toward education pursued outside India(e.g. USA)? If Yes then how do we declare and/or claim for exemptions in tax as where the amount has been used?
Hey, The HUF money can be used for international travel. The HUF can claim it as an expense if the the travel was made for business purposes. Moreover, no, you cannot claim the money used for your child's international studies as an expense.
One key bit you mentioned- Contribute to the capital of the HUF? Now how will the members or Karta contribute to the capital of the HUF meaning is it a loan? is it a gift? Also under what head will the capital so contributed be shown by HUF when it's returns are filed. Also it would be very helpful if you could mention the sections of IT Act.
@@lakshmitejas1685not just on youtube but on practically every website on this topic. 🤦I don't know where the HUF will get working capital in the first place
First of all Thank you for such crisp explanation My query is how HUF is beneficial for Trader falling under 30% Tax bracket, Family comprises of Husband,Wife and Minor Kid Thank You
You can open a demat account on your HUF's name and trade from the same in order to avail the 2.5L basic exemption limit. Moreover, it is likely that the HUF falls in a lower slab rate and thus you mayn't have to pay 30% tax on profits earned from trading through the HUF's demat account.
Thanks for the crisp video, plz can you make a video on HUF trading account, is it considered as corporate account or an individual account and its chrages and taxes.
Just an important note for everyone: You can create a new HUF after getting married, but it won't be considered as a seperate entity until your first child is born. So, unless you have a baby, HUF is useless. I wish Zerodha would give this important detail.
This is not true a husband and wife can open a HUF the law has not specified any thing like this. Kindly watch labour law advisor youtube channel video on the same topic. They have mentioned this point
Nice content. Good to know about tax benefits of forming HUF. What about expenses made using HUF? Can it be deducted from overall income while filling IT return
Plz explain how HUF can be formed in a family of mother and her two kids . Also, is the spouses of son and daughter have any share in the HUF property ? Plz explain
Superb video. Just one question - what is the way to build capital in huf. One of the example given is transferring salary to huf, is this loan or gift? Can clubbing provisions be applied on transfer and consequent income earned on such amount.
One of the many ways to build capital for HUFs is by receiving capital from its members in the form of gifts. Further, the HUF can invest in shares and earn rental incomes to generate wealth. About clubbing, if personal assets of HUF's members are transferred to the HUF without any adequate consideration, then any income from such asset will be clubbed in the hands of member.
@@Quicko adequate consideration like? Also you mentioned in the video about pooling of money- is it also clubbed to contributors? You mentioned about gift from Husband & Wife - income from any assets is also clubbed? I don’t see any benefits if everything is clubbed.
Hi If I am a salaried employ and has and family HUF account. Now if I transfer certain part of my salary into the HUF monthly which is cumulatively less than 2.5 lacs... does that part of my salary becomes non taxable during filing my ITR or it will be non taxable while filing ITR of HUF only??
@zerodha - Can I transfer money to HUF Bank account and later HUF can make Fixed deposit on it? Question 1 : This interest income from Fixed deposits, wo will have to pay tax on it - me or HUF? Question 2 : Can i transfer money from HUF Bank account to my account , Is there limit on the amount of transfer? will it be taxable in my hands?
Great explanation. Thanks. It might be a silly question, but here it goes, if a husband and wife supposedly transfer a capital of 4 lakhs combined to the HUF, it would be non-taxable granted 1.5 lakhs is invested. But, the 4 lakhs earned by the husband and wife has already been taxed, isn't it? Or is there a way to claim money transferred to HUF as an exemption?
This question is like, you have already paid tax to government by TCS - Tax deducted at source when you receive salary. Now, you invest your money and make some capital gain, You STILL have to pay tax on that capital gain.
2 questions sir 1) can huf take interest free loans from the friends of karta?? 2) whether the gift received from mother or father of karta (beyond 50k) will b taxable??
You explained how to put money and assets into HUF. But how a karta or coparcener or any member can use that money that have been received from various sources like rental income, interest income, gifts, stock trading, etc.? for any kind of expenses?
A nice video on HUF indeed with clarity. However I would like to know if my son's wife can be considered as a member of the HUF from the beginning itself ?
Hi, I am salaried employee who owns a property and I receive a rental income from that property . Now I am planning to have HUF account and transfer my property to HUF account to manage the tax that comes from the rental income of that property. Please let me know the tax implications on it. 1. What would be the procedure to transfer personal property to HUF account 2. Will I have to still continue to be taxed on the rental income post the transfer of the property to HUF ?
@vishvajitsonagara250 One doubt, if husband & wife are taking a joint loan and the house property is also co-owned, and they open a HUF so, do they still need to add the HUF as a co-borrower & co-owner to claim the interest & principal benefits through HUF?
Please cover clubbing of income wrt to ITR post creating HUF., the aspects to be considered while doing ITR for karta., members of HUF I get different answers from many on this aspect.
Once PAN of HUF is obtained and bank account is opened, the members can transfer the money to HUF since gifts received from members are tax free. Thus, any income earned by the HUF shall not be clubbed with the income of any member even though the HUF earns income on money transferred by any of the members of the HUF.
@@Quicko great to hear this crystal clear., thanks a ton for covering HUF topic as it is really gaining popularity among retail investor crowd..kudos to Quickly 👍👍
How business income is generated in huf and how much expenses we can claim from this income apart from basic 2.5 lakh deduction and 80c and 80d deduction
HUF can be dissolved by executing a full partition deed among all the members. The HUF will have to make an application or claim of partition before the Income Tax Assessing Officer (AO). Once the AO accepts the claim of partition, the HUF can be closed and PAN of HUF should be surrendered to AO.
A Central Government Employee cannot own or run a business as per CCS rules. My question is…. Can the HUF (karta of whose is a Central Govt. Employee) run a business and not violate the CCS rules?
HUF ke liye benefits old regime me hai ya new regime me. Slab rate kya hai , 87 A ki rebate milti hai kya Isme 80C ki deductions milti hai. Meri mainly interest se income hai.
Quick and common query Let us assume my taxable income is 3 lakh and i am in old regime. So upto 2.5L no tax for the remaining 50k i need to pay 5% tax (2500) If i transfer that 50k to my HUF account i dont need to pay any tax? Can i save that 2500? Can i withdraw that 50k from HUF immediately and use it.
No, if you transfer any amount to the HUF it will be treated as a gift. Hence, the HUF will not be liable to pay taxes on the amount that you transfer, however, your taxable income remains the same, i.e. ₹3 Lakhs.
What if Mr Sharma needs money badly? Can he transfer to his banking account from his huf account? Does this require any kind of documentation? If huf gets ipo allotment, how to sell those? Any documentation while selling the shares from huf demat?
If we have only 2 members (myself and my wife) and my only daughter got married about 5 years back, can we (myself and my wife) join together to set up HUF?
If both husband and wife are working and their incomes fall in higher slabs, the interest received from savings account will also be taxed at a higher rate. Instead, if they transfer this amount to HUF's account, the interest will be treated as HUF's income and hence, the basic exemption of ₹2.5 lakhs will be applicable.
Hi Dear, I have few questions here - 1. Forming a new HUF has 0 funds with it. Suppose I (member) transfer funds to HUF as gift and start investing. Earned STCG. Will this STCG not clubbed with my personal income ? 2. Can I (member) transfer to HUF interest-free loan ? If so, what are the requirements to show to IT Department if ever asked ?
Hey, With regard to your queries, 1. In this case, the amount will be considered as the HUF's capital and clubbing will not be applicable. 2. We do not recommend giving interest-free loan. You can charge a minimum interest as prescribed by the RBI.
Scenario 3 explained in managing finances needs correction as what am told by different CA firm's, if I(Karta) pools my salary income to HUF which generates interest on it. That interest income will be taxed under my name not HUF under clubbing provisions. Several notices have been sent by IT for this mistake as HUF are always on radar of ITO. Please confirm or correct.
Hey, After the HUF is formed, the members can add money to it by transferring it as a gift. Since members are considered relatives of HUF, gifts from members are exempt in the hands of the HUF and the HUF can use this capital to generate income, and thus in our opinion clubbing will not be applicable here. You can also get a second opinion from a CA or lawyer for the same.
@@QuickoYes, not just second opinion but multiple opinions and real case reference where notices were issued by ITO, I suggested to make that amend in video. Only way to avoid clubbing provision is to loan HUF rather than gifting but that also comes to radar of ITO if loan is not given at market rate and rather booked at 1 or 2% rate. So, again HUF if created should be treated as taken up flying arrow if purpose is tax evasion. Digital govt. is now 5 steps ahead than their countable tax payers which they cant afford evade from tax paying anymore.
Hey, this is the process of forming an HUF in India: Step 1: Create an HUF deed. It is a written formal document on a stamp paper stating the names of Karta and other members of the family. Step 2: Apply for PAN Step 3: Open Bank Account We hope this helps! We advise you to contact a lawyer for further details.
If I'm right HUF can be formed in 3 ways, the first way = from ancestral property/money (proof needed), the second way = relenquish your right in your indivudal property/money for the formation of HUF (documentation required), the third way = a third party giving you a gift along a gift deed which mentions the gift is specifically for the welfare and benefit of all the members of the family (Gift deed and documentation required). Thus in the above 3 ways you can create your HUF nucleus and HUF File. I AM NOT QUALIFIED AS A LAWYER BUT THE ABOVE INFO SHOULD BE CHECKED WITH A QUALIFIED LAWYER.
If I have HUF and property in name of me, wife and HUf. If I am paying 6lakh interest and 3 lakh principal. Can we all claim 2lakh for interest benefit for each member and 1 lakh as principal benefit for all three members. Please guide
Hey, deduction on home loan interest and principal can be claimed by the one who is repaying the loan, i.e. co borrowers of the loan. So, if your wife and HUF are also co-borrowers in the loan, they can claim deduction on the repayments.
Hi, we've explained the process here: support.zerodha.com/category/account-opening/company-partnership-and-huf-account-opening/huf/articles/what-are-the-documents-required-to-open-a-huf-account-at-zerodha
3 месяца назад
What exactly do you mean when you state" Coparcener can even ask for partition of HUF?
how do i create a huf & transfer legally some of our money into it? me n my wife are both salaried & want huf account specifically for trading/investing
Hey, below is the process of forming an HUF in India: Step 1: Create an HUF deed. It is a written formal document on a stamp paper stating the names of Karta and other members of the family. Step 2: Apply for PAN Step 3: Open Bank Account Once you have opened a bank account on the HUF's name, you can transfer money in the same from your personal bank account. We hope this helps! We advise you to contact a lawyer for further details.
Transfer of fund will be loan or considered as gift or additional income. If I am holding 50lakh equity shares and I am transferring the same to my huf . Who will have tax benefit. If HUf earning 5lakh profit by selling LTCG how much tax to pay
Please let me know if following scenario is possible HUF created for husband+wife+minor kids Wife has trading income Husband has Salary income Wife transfers 50% Equity Shares to HUF account Husband adds funds to the HUF account how will be the taxation for Husband, Wife & HUF after this setup assuming Husband is only earning Salary, Wife earns FnO trading income & also HUF earns FnO trading income
Do the children of karta automatically become a coparcener in the HUF or can Karta decide at the time of formation of HUF whom does he want to include in HUF and whom he wants to exclude?
One example of high value transactions where HUF can be helpful is availing tax exemption on long term capital gains from the sale of stocks, mutual funds, real estate, etc. under sections 54 and 54F.
If members transfer their own money to an HUF account then AFAIK the tax will be in the hands of members, not HUF. So I think we cannot save taxes this way. Please enlighten if I missed anything.
The income will be of HUF and not members. I hoe it is clear. It is as simple as, tou transfer money to your kid who is adult, so legally you can gift money and the income generated from that money will be taxed in hands of kid.
After the HUF is formed, the members can add money to it by transferring it as a gift. Since members are considered relatives of HUF, gifts from members are exempt in the hands of the HUF and the HUF can use this capital to generate income, and thus in our opinion clubbing will not be applicable here. You can also take a second opinion from a CA or lawyer for the same.
Please explain PPF part in detail. Suppose I have my individual PPF account in my name. I invested 1.5 Lakh in ppf. Can I claim deduction from my HUF account?
If you have made the investment in PPF from your account, you will be eligible to claim the 80C deduction of ₹1.5 lakhs. Moreover, if the investment was made towards any of the members' PPF account from the HUF's account, then yes, 80c deduction can be claimed while filing the ITR for HUF as well.
Dear you are misguiding. When a member fund HUF, any earning from that funding will be clubbed to the income of concern member and he/she will be taxed accordingly.
Hey, If you buy a car on HUF's name and the same is used for the business run by the HUF, you can claim depreciation and the running expenses like service cost, fuel etc. for the car.
Is it mandatory to have children to take tax benefit? A lot of places it's mentioned that the tax benefits can only be availed after the first child only. Before that the clubbing provision will come into picture and whatever interest or income gets generated by huf's account will be taxed to the karta of huf.
No, it is not mandatory to have a child to form an HUF and enjoy tax benefits. However, it is possible that clubbing provision may come into picture in some cases and we suggest you to consult an expert while planning taxes using HUF.
Hi, we've explained the HUF account opening process here: support.zerodha.com/category/account-opening/company-partnership-and-huf-account-opening/huf?language=english Once the account is opened, you can transfer the chares by following the steps given here: support.zerodha.com/category/your-zerodha-account/transfer-of-shares-and-conversion-of-shares/transfer-securities/articles/how-do-i-transfer-shares-from-another-demat-account-to-my-zerodha-demat
Hey, this is the process of forming an HUF in India: Step 1: Create an HUF deed. It is a written formal document on a stamp paper stating the names of Karta and other members of the family. Step 2: Apply for PAN Step 3: Open Bank Account We hope this helps! We advise you to contact a lawyer for further details.
The amount of exemption is ₹1 lakh if the LTCG were in the name of HUF, i.e., HUF's demat. The members of the HUF can claim an exemption of ₹1 lakh each if they have long term gains in their individual demat account.
@@Quicko Essentially, HUF is just another logical identify one could create, with similar tax rebates as Individuals. So, one can save Tax a little to the tune of bringing down Taxable income by couple of Lakhs. it won't have a much impact for those who deal profits in 50 Lakhs, 1 Cr or more. is that right ? Thank you.
Kindly guide for below situation Mr sharma is married and having 3 children . Child 1 Major, child 2 minor , child 3 minor. Mr sharma expired . After the death of mr sharma can MRS sharma forms HUF???
An HUF cannot earn salary or professional income. Hence, personal income of the members in the form of salaries or professional fees cannot be treated as income of the HUF.
Yes, NRIs can form an HUF. However, the residential status of the HUF will be determined based on from where it is managed. Keep in mind that the income earned by the HUF would be taxed according to the tax laws applicable to HUFs in India. Additionally, NRIs need to comply with the regulations of the Reserve Bank of India (RBI) regarding financial transactions and repatriation of funds.
