The Finance Ministry has said over 8.75 lakh Hindu Undivided Families (HUFs) have filed Income Tax Returns (ITRs) and claimed deductions worth Rs 3,803 crore during 2022-23.
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The Finance Ministry has said over 8.75 lakh Hindu Undivided Families (HUFs) have filed Income Tax Returns (ITRs) and claimed deductions worth Rs 3,803 crore during 2022-23.
The information came from Minister of State for Finance Pankaj Chaudhary in a reply to the Rajya Sabha over details of the number of HUFs availing tax benefits. A HUF is a family comprising all lineal descendants of a common ancestor, including wives and unmarried daughters. This provision covers Jain and Sikh families as well.
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In reply to another query, whether the government has assessed the impact of the Uniform Civil Code on tax benefits to HUFs, the minister said, “No such assessment has been made as there is no such Code at present”.
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It is to be noted here that for the Financial Year 2021-22, as many as 8,77,303 HUFs claimed deductions worth Rs 3,745.51 crore under the Income Tax Act.
What Income Tax Act says on tax deductions of HUFs
The Income Tax (IT) Act accords ‘legal person’ status to HUF and entitles them to all tax deductions under Chapter VI-A. HUFs are taxed at the same rate as individuals, and they can claim applicable deductions.
A HUF is taxed on the same slab rates which are applicable to an Individual. They are also liable to pay Alternative Minimum Tax if the tax payable is less than 18.5 per cent (including cess and surcharge) of “Adjusted Total Income” subject to prescribed conditions.
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