Deduct salaries of members from HUF income to lower its tax bill

HUFs can also claim tax benefits on home loan repayments, insurance premiums, and other tax-saving investments

A Hindu Undivided Family (HUF) is a legal and financial arrangement that is found only in India. The defining characteristic of an HUF is that it is taxed separately from its members. By allowing income to be spread across an additional entity (the HUF), and through its ability to claim deductions and exemptions under the Income-Tax (I-T) Act, a HUF can serve as a valuable tool for reducing a family’s tax burden.

Kunal Savani, partner, Cyril Amarchand Mangaldas, says, “HUF, a uniquely Indian entity, is for large joint families and is governed by Hindu personal laws. As a distinct taxable entity,