Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tax Provisions for Special Cases

Caselet: Mrs. Kavita Rao, a resident senior citizen with total income, in the old regime, wants to understand the Hindu Undivided Family (HUF) as a separate taxable entity. Which statement about an HUF's taxation is correct?

An HUF is a separate taxable person with its own PAN and assessment, and in the old regime it can claim deductions such as section 80C on eligible investments. Its income is not generally clubbed with the Karta's income, and it can own property separately.

  1. AAn HUF is taxed as a separate person and can claim a deduction under section 80C for eligible investmentsCorrect
  2. BAn HUF is not a person under the Income-tax Act
  3. CAn HUF cannot own any assets separately from its members
  4. DAn HUF income is always clubbed with the Karta's income

Explanation

An HUF is a separate 'person' for tax purposes with its own PAN and assessment, and in the old regime it can claim deductions such as section 80C for eligible investments. It is not clubbed with the Karta's income in general.

Did you get it right without looking?

One question tells you little. A timed set on Tax Provisions for Special Cases shows your real accuracy, how long you take and where you lose marks.

Practise Tax Provisions for Special CasesFree diagnostic mock

More Tax Provisions for Special Cases questions