HUF-The Saga

HUF - A Tax entity for your benefit
________________________________________
A Common Question which a
Taxpayer usually asks a Chartered
Accountant at the time of filing his
Income tax Return;
How to save tax legally by forming
HUF?
The Hindu Undivided Family (HUF)
structure is a very effective way to
save tax and a lot of people are
eligible to create HUFs but somehow
there is very little awareness about
it.
What is HUF?
Hindu Undivided Family is a
separate Tax Entity recognized
under Income-tax Law. It may be
noted here that as per the definition
in section 2(31) of the Income-tax
Act, 1961 a Hindu Undivided Family
is treated as a separate Tax Entity.
The Income of an HUF can be
assessed in the hands of the HUF
alone and not in the hands of any of
its members. The senior most
member of the family who manages
the affairs of the family is called
the Karta. Minimum two people (at
least one male member) are
required for the HUF to come into
an existence.
How to create HUF?
Sometimes a question arise in the
minds of a tax payer that now a
days it is not possible to create new
tax entity in the form of Hindu
Undivided Family. Well if we screen
very carefully all the provisions as
are contained in the Income-tax
Act, 1961, we come to the
conclusion that there is no
provision existing in the Statute as
on today prohibiting creation of a
new tax entity of your HUF.
However, what is prohibited now is
gifting of the money by the
members of the HUF to their own
HUF. Hence, from practical angle
the tax payers will be happy to note
that it is possible today to create a
new tax entity in the name of your
HUF.
How to put funds in HUF?
There can be numerous ways, some
popular ways are-
1. One can receive money by way of
gift from the friends or relatives.
2. Parents can also gifts fund to an
HUF via gift deed clearly specifying
gift is directly towards son’s HUF
not towards son.
3. Gift can be accepted from
stranger but only upto INR 50,000
(section 56, income tax act, 1961)
Benefits of forming HUF:
1. HUF is eligible for deduction
under 80D (Insurance Premium paid
on health of member), 80G
(Donation), 80L (income from bank
and post office deposit), 80C
(assorted list of items) under
Income tax act. 1961
2. HUF also enjoys exemptions
under section 54 and 54F in respect
of Capital gains.
3. HUF also gets advantage of slab
rate taxability.
4. Also, under Wealth Tax Act, 1957
HUF is treated as a distinct entity
and enjoys separate taxability.
(general exemption of Rs. 15 lakh)
Specific Tax Planning tools for HUF:
Create more assessable units by
partition of HUF-The tax liability can
be reduced by partition of the HUF.
This can be easily done in a case
where the partition results in
separate independent taxable units.
Remuneration to Karta & members-
pay remuneration to Karta & its
members for the service rendered
by them to the family business. The
remuneration so paid would be
allowed as deduction from the
income of HUF.
Making loans to member of HUF- It
can be used as an effective tool in
tax planning. Loan can be made
with or without interest.
Hindu Undivided Family is a
wonderful tool of legal tax planning
in a family. So if you do not have a
Hindu Undivided Family tax entity
in your family, then it is worthwhile
that you devote some time and
energy that you try to go in for
creating a new tax entity of your
Hindu Undivided Family.

Service Tax Registration

Service Tax Registration
________________________________________
PROCEDURE FOR REGISTRATION:-
1. Fill the (Form ST-1) in duplicate.
Enclose photocopy of PAN card and
proof of address to be registered.
2. Copy of PAN card is necessary as
a PAN based code (Service Tax
Code) is allotted to every assessee.
3. These forms are required to be
submitted to the jurisdictional
Central Excise office (in case of six
Service Tax Commissionerates, to
the jurisdictional Division office.
There are separate service tax
commissionerates in Mumbai,
Chennai, Delhi, Kolkata, Bangalore
and Ahmedabad
4. A person liable to pay service tax
should file an application for
registration within thirty days from
the date on which the service tax on
particular taxable service comes
into effect or within thirty days
from the commencement of his
activity.
5. Where a person, liable for paying
service tax on a taxable service,
(i) Provides such service from more
than one premises or offices; or
(ii) Receives such service in more
than one premises or offices; or,
(iii) Is having more than one
premises or offices, which are
engaged in relation to such service
in any other manner, making such
person liable for paying service tax,
and has centralised billing system or
centralised accounting system in
respect of such service, and such
centralised billing or centralised
accounting systems are located in
one or more premises, he may, at
his option, register such premises
or offices from where centralised
billing or centralised accounting
systems are located.
6. The registration under sub-rule
(2), shall be granted by the
Commissioner of Central Excise in
whose jurisdiction the premises or
offices, from where centralised
billing or accounting is done, are
located:
Provided that nothing contained in
this sub-rule shall have any effect
on the registration granted to the
premises or offices having such
centralised billing or centralised
accounting systems, prior to the
2nd day of November, 2006.
7. A single registration is sufficient
even when an assessee is providing
more than one taxable services.
However, he has to mention all the
services being provided by him in
the application for registration and
the field office shall make suitable
entries/endorsements in the
registration certificate.
8. Assessee should get the
registration certificate (registration
number) within 7 days from the
date of submission of form S.T.1,
under normal circumstances.
9. A fresh registration is required to
be obtained in case of transfer of
business to another person.
10. Any registered assessee when
ceases to provide the taxable service
shall surrender the registration
certificate immediately.
11. In case a registered assessee
starts providing any new service
from the same premises, he need
not apply for a fresh registration.
He can simply fill in the Form S.T.1
for necessary amendments he
desires to make in his existing
information. The new form may be
submitted to the jurisdictional
Superintendent for necessary
endorsement of the new service
category in his Registration
certificate.

Theory of life.

Theory Of Life..

No one is ever busy in his/her life.Its all about Priorities.

Love doesn't start in morning & doesn't end in evening.
It starts wen U dn't need it & it ends wen U need it most.

Tears dn't come wen U miss A person Bt they come wen U dn't want to miss a person.

Never raise U'r voice just improve the Quality of U'r argument.

Life is much like Facebook,People will like U'r problems & coments but no 1 gona solve them.
Because everybody seems so busy in updating their own status.

U regularly texts U'r friends they dn't reply u,But if U text frm new no: Everyone will reply that Who r'u ??? People have time for unknown bt n't for known This is theory of Life..
It's World Best Friends Week'.

Success

Steps in ladder of success 1. I won't do it. 2. I can't do it. 3. I want to do it. 4. How do I do it? 5. I will try to do it. 6. I can do it. 7. I will do it. 8. Yes, I did it. Wow.