HUF stands for Hindu Undivided Family. Under Indian law, a HUF is recognised as a distinct or separate legal entity, just like a person. Families can form a Hindu Undivided Family (HUF) by pooling their resources. The HUF is then taxed separately from the individual members.
This article discusses what HUF meaning is, what its benefits are and how HUF can save tax.
The HUF meaning is Hindu Undivided Family. Hindus, Jains, Sikhs, and Buddhists who descend from a common ancestor can form a Hindu Undivided Family (HUF). HUF is treated as a separate entity or person under the Indian law.
HUF definition includes the following:
The benefits of forming a HUF include:
1. HUF tax benefits: As a HUF is a separate taxable entity (with deductions and exemptions), the overall tax paid by the members and the HUF can be reduced.
2. Estate Planning: A HUF facilitates a smooth transfer of property and wealth to future generations.
The following HUF features allow you to avail of HUF tax benefits:
1. Tax exemption: HUF enjoys the same tax exemption up to INR 2.5 Lakhs. This is in addition to the tax exemption enjoyed by the individual members.
2. Tax exclusion: For a HUF, income from the property transferred by a member to the HUF, income from women's personal property vested into HUF, and income from the impartible estate are not taxable.
Hindu Undivided Family, meaning HUF, is a unique formulation under Indian law for Hindu, Jain, Sikh and Buddhist families. By forming a HUF, a family can take advantage of various HUF tax benefits on their investments.
Download the Tata Capital Moneyfy app or visit our website to explore investment options with HUF and begin your investment journey under expert guidance today.
HUF comes under the Hindu Law Board. A married couple or at least two members of a joint family (with one of them being male) can form a HUF.
If you are a Karta, you can withdraw money from the HUF account for regular expenses and family maintenance.
The two conditions to form a HUF are that there must be at least two members, and one of these members must be male.
Yes, a salaried person can create a HUF, but the salary income cannot be included in the HUF's income.
Yes, you can transfer your fixed deposit to a HUF account, but interest earned will be taxed under HUF.
Yes, a HUF account can be used for making investments.
Since a HUF is considered a separate entity and has its own PAN card, it can also have a Demat account for investments.
Monetary gifts received by HUF over INR 50000 in a financial year are taxable.
Investments after the HUF partition are divided among the practitioners based on the agreement or partition deeds.
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18 June 2025
2 mins read
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