Harun Raaj & AssociatesHarun Raaj & Associates

Claim audit · FY 2026-27

Open an HUF and get a second tax-free slab

Partly trueAudited: 2026-08-09

The condition that decides it

HUF is a real separate person — but only for genuine joint-family income/corpus. Salary or professional income routed into it stays yours; property you transfer in is clubbed u/s 64(2). Works for ancestral assets, fails as a salary-parking device.

What the department sees

Both ITRs, bank trails, source of HUF corpus

Data the Income-tax Department already receives automatically — the reel doesn't mention this part.

The real math

An HUF can be a separate person under section 2(31), but the arithmetic starts with ownership and source, not a second slab slogan. If genuine ancestral or joint-family income is ₹6,00,000, that income is tested in the HUF’s return. If a member’s ₹6,00,000 salary is merely credited to the HUF, the source remains personal salary and the claimed split is ₹6,00,000 − ₹6,00,000 = ₹0 shifted. If a member transfers property to the HUF, section 64(2) clubbing can return the income to the transferor. Section 171 concerns partition, so records of corpus, bank trails and both ITRs matter. The reel implies a freely available duplicate tax-free allowance; the statute produces a separate taxable person only for genuine joint-family income or corpus. Any final tax saving then depends on the applicable slab and the deductions actually available to the HUF.

Questions people actually ask

Does an HUF automatically give a second slab?

Section 2(31) recognises an HUF as a separate person, but only genuine joint-family income or corpus belongs there; salary cannot simply be parked.

Can salary be transferred to an HUF?

Section 64(2) and source principles prevent converting personal salary into HUF income by a bookkeeping entry. The salary remains the earner’s income.

What records support an HUF?

Section 2(31) evidence includes both ITRs, bank trails and the source of HUF corpus. Section 171 applies to partition questions.

Sections: 2(31), 64(2), 171 · We audit claims, not creators. Reviewed by Harun Raaj & Associates, Chartered Accountants · All audited claims