NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tax Provisions for Special Cases
Under the Income-tax Act, a Hindu Undivided Family (HUF) is treated for tax purposes as which of the following?
An HUF is a separate taxable person under the Income-tax Act. It has its own PAN, files its own return and is assessed on its own income, rather than being merged with the Karta's personal income, except in specific clubbing situations.
- AA separate taxable person distinct from its membersCorrect
- BA part of the Karta's individual income for all purposes
- CAn association of persons without a separate PAN
- DAn entity exempt from tax if income is below the Karta's limit
Explanation
An HUF is a separate 'person' under the Income-tax Act, so it files its own return and holds its own PAN. Its income is assessed in its own hands, not clubbed with the Karta's, except in specific clubbing cases such as income from converted individual property.
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