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HomeLatest NewsBusinessZerodha CEO Nithin Kamath Shares 'HUF' Hack to Reduce Income Tax Burden...

Zerodha CEO Nithin Kamath Shares 'HUF' Hack to Reduce Income Tax Burden – Prime Time News24


Zerodha co-founder and CEO Nithin Kamath has provide you with a tip that may show you how to decrease your complete revenue tax outgo. (File photograph)

You need to get a separate PAN and open a checking account within the title of the HUF to assert the revenue tax advantages

Because the monetary 12 months is approaching an finish it’s the time to go for all-last minute tax saving investments to scale back your revenue tax legal responsibility for the monetary 12 months 2023-24. Other than the normal tax-saving investments, there may be one other route to save lots of extra tax. Zerodha co-founder and CEO Nithin Kamath has provide you with a tip that may show you how to decrease your complete revenue tax outgo.

Kamath in a tweet shared how married Hindus can enhance their tax financial savings by means of the Hindu Undivided Household (HUF) route.

“If you happen to’re married and a Hindu, you need to use an HUF to plan and save your taxes. HUF is handled as a separate entity, so all these deductions will apply individually to HUF together with the person deductions,” he wrote on X.

The Zerodha CEO additionally instructed transferring rental revenue from property to HUF and opening a demat account within the title of the HUF, amongst others as a couple of methods to assert extra tax advantages.

“So, transferring any property yielding rental revenue to the HUF, opening a Demat account within the HUF title, transferring cash to the HUF checking account, accepting items, and so on.” he added.

Alongside together with his tweet, Kamath additionally shared an in depth video hyperlink to assist his followers, particularly married Hindus, perceive using HUF for planning and saving taxes.

Because the Zerodha CEO shared the important thing particulars earlier than the 31 March tax deadline, social media customers additionally reacted to the identical. Former IAS officer KBS Sidhu, whereas recommending married {couples} to create an HUF, wrote, “It’s a frequent misimpression that an individual must be blessed with a son to have the ability to kind an HUF. Furthermore, individuals following the religions of Sikhism, Jainism, and Buddhism are additionally eligible for the good thing about HUF.”

DazeInfo CEO wrote, “Say goodbye to tax woes and hey to monetary freedom with HUF! Married Hindus, take notice: HUF isn’t only a tax-saving technique, it’s a game-changer. By leveraging its advantages, you possibly can take management of your funds and safe a brighter future.”

Hindu Undivided Household and Tax Advantages

A Hindu Undivided Household, or HUF, is mainly a household consisting of lineal descendants, together with wives and single daughters from a typical ancestor. As HUFs are handled as separate authorized entities beneath the revenue tax regulation in India, they’re supplied a lot of tax advantages, in addition to the tax deductions allowed to particular person members.

Whereas the pinnacle of the household, often known as ‘karta’, leads the HUF, different members are coparceners. A HUF will be shaped with simply two members, say the husband and spouse; nonetheless, the spouse is taken into account a member and never a coparcener. For tax functions, one should have at the very least two coparceners.

An HUF can declare deductions beneath Part 54, Part 54B, Part 54D, Part 54EC, Part 54F, Part 54G, and Part 47 of the Earnings Tax Act, 1961.

You need to get a separate PAN and open a checking account within the title of the HUF to assert the revenue tax advantages. Recognised as a separate entity beneath the Earnings Tax Act of 1961, a separate revenue tax return (ITR) must be filed within the title of the HUF.

It’s necessary to notice that an HUF can solely be arrange by Hindu, Buddhist, Sikh and Jain households.

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