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How is Income Tax for HUF Calculated?

Calculation of Income Tax for Hindu Undivided Family

Here is a step-wise guide to computing income tax for HUF:

Step 1: As per the residential status, the gross income of HUF will be calculated under four heads of income.

Step 2: Sections 60 to 63 are applicable for HUF tax computation.

Step 3: Start counting losses from the previous years and carry forward them if it is permissible.

Step 4: By counting steps 1 to 3 you will get the gross total income and afterwards the deductions will be calculated as per the following sections:

Section

Types of Deductions

80C

Deductions on provident funds, life insurance premiums, equity and debentures

80D

Medical insurance premium

80DD

Treatment expenditure for disabled people and dependent handicapped individuals

80DDB

Deduction on medical treatments

80G

Deduction on charitable donation

80GGA

Specific deductions on rural development and scientific research contribution

80GGC

Deduction on contribution to political parties

80-IA

Special income from industrial investments and other infrastructural developments

80-IB

Deductions on income from other than industrial investments and other infrastructural developments

80-IBA

Deductions on Housing Project Gains

80-IC

Special deductions on the income of specific enterprise tasks

80-ID

Deductions on the income from convention centers, hotels, etc.

80-IE

Certain deductions specific to North Indian states

80JJA

Income from bio-degradable waste processing businesses

80JJAA

Employment of new employees

80TTA

Deductions on savings account

Step 5: The remaining amount will be counted as Total Income and it will be rounded off to the nearest ₹10.

Step 6: After the deductions, the tax will be calculated as per the updated tax slab rates

Step 7: A surcharge of 10% will be added to the total income of ₹5000000 to ₹10000000 and 15% of income tax if a person has more than 1 crore as a total income

Step 8: 2% education cess and 1% SHEC will be levied

Step 9: From the final amount, TDS and paid advance tax will be deducted. This total income amount will be rounded off as per the nearest ₹10 and will be calculated as a self-assessment tax.

Benefits of HUF Income Tax Return

FAQs About HUF and Income Tax