Hindu Undivided Family (HUF) Taxation

Hindu Undivided Family (HUF) Taxation – A Hindu Undivided Family (HUF) is a separate legal entity for income tax purposes in India, consisting of lineal descendants of a common ancestor and their spouses. An HUF can earn income, hold assets, and file tax returns independently of its individual members. The Assessment Year (AY) is the year in which income earned during the preceding Financial Year (FY) is assessed and taxed. Income earned by an HUF from sources such as property, business, or investments is reported under the HUF’s PAN and taxed in the corresponding AY.

Example: If an HUF earns rental income or business profits in FY 2022–23 (1 April 2022 – 31 March 2023), it is assessed and taxed in AY 2023–24.