💰 Tax Savings · Structure & split income
Use an HUF — a second taxpayer with its own exemptions
✍️ EaseValue Advisors · Updated 17 Jul 2026 · FY 2025-26
In short
A Hindu Undivided Family (HUF) is a separate taxpayer with its own basic exemption, slabs and deductions. Routing family/ancestral income and investments through it legally splits income and cuts the total tax.
Why it saves
The HUF files its own return, gets its own basic exemption and 80C-type deductions, and is taxed at the slab rates — so income parked in the HUF isn't added to your personal (higher-slab) income.
How to set it up
- Create the HUF with a deed and get a separate PAN.
- Fund it with ancestral property, gifts from the wider family, or a will — not from your own income (that gets clubbed).
- The HUF can run a business, own property and invest; the Karta manages it.
Watch out
- Assets you personally gift to the HUF trigger clubbing (Section 96).
- On partition, assets pass to coparceners (Section 315, old 171).
The law behind it
Income-tax Act 2025 (HUF as person) Section 315 (old 171 — partition) Section 96 (old 64 — clubbing)
General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions
change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.
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