Therefore, the concern about the tax revenues does not seem justified, as abolition of HUFs will hardly result in any increase in tax collection. South Asia Multidisciplinary Academic Journal. However, it has some disadvantages too. One single person alone cannot form an HUF.
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For public finance, any tax system has to be fair, just and equitable. Law and Gender Inequality: An HUF is formed by a family.
HUF continues to be assessed as such till partition: Get done in 7 mins.
Since the tax law does not recognize the relationship between the individual and the HUF, these separate entities each will be taxed as follows. Productivity, Exports and Investmentpaw by F. FD April 12, For instance, if HUF consists of only husband and wife, then there is only one coparcener. This inclusion is based hindy a much longer history of recognition of customary law by the British colonial state in India.
What is Hindu Undivided Family and how is it taxed? - Livemint
The HUF was treated on par with corporate entities on this point and the provision that was meant for firms also applied to the HUF. Two of the four women were married into families whose ethnicity was different from their own.
The common property cannot be sold without the concurrence of all the members.
She could not reside in the family home unless she was single or divorced, and could not claim her share of property as long as the men of the family continued to live in it. Lxw is usually used by families as a means to build assets.
The Hindu Undivided Family in Independent India’s Corporate Governance and Tax Regime
In sharp contrast in the last two decades, the dominant literature on the post-independence period is based on an envisioning of Indian business as a plethora of independent firms whose relationships with one another are based on industrial cluster-formation.
So on his total income of Rshe would pay Rs The following incomes are not taxed as income of HUF c. The HUF found undivuded recognition in the late 19 th century, but it was the Income Tax Act under colonial rule in that gave it the status of a separate and distinct tax entity. These tax slabs are defined in terms of a certain percentage of income, which increases with increasing intervals of income threshold.
Views Read Edit View history. The various reports on tax reforms in the last twenty years also reflect this dichotomy in which the institutional assumptions of corporate tax rationalization completely occlude the purview of the system of self-rationalized tax avoidance offered by the interlocking tax entities. There is no systemic compilation undigided data by the Indian state on interlocking tax entities and the extent of direct and indirect ownership of economic assets and property by family-owned business groups.
Different taxable units can be formed of HUF using the loopholes of will or gift.
Are suggestions to abolish Hindu Undivided Family (HUF) justified?
The recent data that has been released since —13 to —15 shows a decline in the ETR of individuals. For instance, under tax laws, there is the concept of community of property for those governed by the Portuguese Civil Code, ffamily half the income is taxed in the hands of each spouse.
This is why in the contemporary tax structure individual and HUF assessees are treated on par as we have argued so far. In other words, the recommendation is to abolish the system of HUF altogether all over India.
An economist for all seasons Opinion Time for the government to reassess its position Usha Martin shareholders approve sale to Tata Steel. Log In Sign Up. Women were denied an equal share in any property.
The HUF being a separate taxable assessee, can claim deduction under section 80C. It is interlocked into the institutional structure of asset, wealth and property holding in India in a maze of interlocked family and business entities spanning all five tax categories which comprise the Hindu family-owned business group.
More than 90 percent of HUF income accrues from business income, short and long term capital undividev and interest income. So he would pay a total tax of Rs One partnership firm was invested in financial services while the trusts ran for-profit schools along with temples, an old-age home and an ecological park.