Skip to content

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

Under the Income-tax Act as taught for NISM-Series-X-B, which of the following is a feature of a Hindu Undivided Family (HUF) for tax purposes?

An HUF is a separate assessable person for income-tax purposes. It arises from Hindu law status rather than a contract, can own assets, and is taxed on its own income, with the Karta only acting as manager.

  1. AIt is treated as a separate assessable person distinct from its membersCorrect
  2. BIt can be formed only by a contract between two unrelated persons
  3. CIt cannot own capital assets in its own name
  4. DIt is taxed only through the hands of the Karta personally

Explanation

An HUF is included in the definition of 'person' and is assessed as a separate taxable entity. It arises by status under Hindu law, not by contract, and it can own assets and earn income in its own name. The Karta manages it but is not taxed on its income.

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