Taxation of HUFs:
HUFs are liable to pay tax on income exceeding Rs. 2,00,000 at the rates applicable to individuals.
How to create new HUF?
Actually when we talk of creating an HUF as a separate entity for tax purposes, we mean creation of HUF property.
HUF property can be created by the following ways:
By devolution of interest in coparcenary property of a coparcener who dies intestate; (2)
By inheritance through a specific bequest under a will;
By partition of a larger HUF
By reunion of separated coparceners;
By blending of individual property with the family hotch-potch;
CLUBBING OF INCOME
income earned by a minor or a spouse can be clubbed with your income, which means that you will have to pay tax on your taxable income as well as theirs. However, there are a few instances where the income will not be clubbed in your hands.
Income earned by a minor is added to the income of the parent with the higher income, irrespective of the residential status of either the child or the parent. That is, clubbing applies even if the minor resides in India and parents are non-resident Indians (NRI) or vice versa.
Non-clubbing of minor’s income. Clubbing provisions don’t apply to the income of a minor if a minor earns money from manual work or by using his skills, experience, talent or specialized knowledge, the income will be taxed as his own income and will not be clubbed with that of the parent. For instance, if a minor earns money from acting in a play, participating in a quiz, selling painting or using computer-related skills, the money will be taxed in his own hands.
Any income that arises from any assets that have been gifted to one’s spouse will be clubbed with the income of the person making the gift. However, any income earned on the income from the assets that have been gifted, if they have been reinvested, will not be clubbed with the income of the person making the gift. Such income will, instead, be taxed as the independent income of the recipient spouse.
Ayakar Sampark Kendra (ASK)
0124-2438000 for the following:
1. Information on Forms for PAN
2. Status of PAN application
3. Return Forms
4. Help on payment of taxes
5. Challans 280, 281 & 282 Forms will be sent by Fax/Email