A legal hack to further reduce your taxes

Whether you fall in the 5 per cent tax bracket or the dreaded 30 per cent category, there's one common yearning that unites us all - our insatiable thirst for income-tax deductions and exemptions. Which is why we anxiously glue ourselves to the TV screen on budget day, praying for some tax relief. But what if we tell you you can immediately double your tax benefits? No, we are neither joking nor making any flashy clickbait promises. The key lies in embracing a perfectly legal tax-saving manoeuvre known as 'HUF'. However, like any financial decision, it has its fair share of pros and cons. So, let's understand if you should set up an HUF to save tax. What is HUF An HUF is a family that comprises all the persons lineally descended from a common ancestor, including wives. As per the Indian tax laws, an HUF is recognised as a distinct entity. It is subject to tax like an individual taxpayer, and you have to file its tax return separately. An HUF is recognised across India, except Kerala. Benefits of creating an HUF You get the benefits of two PAN cards, meaning you can shift some of your income to the HUF account. This

This article was originally published on May 26, 2023.