HUF Tax Slabs, Deductions & 5 Common Mistakes

HUF Tax Slabs

HUF is taxed like an individual (non-senior citizen) with the same slab rates. Under the new regime, the basic exemption is Rs 3 lakh. Under the old regime, it's Rs 2.5 lakh. However, Section 87A rebate is NOT available to HUF — so there's no zero-tax up to Rs 12 lakh benefit.

Available Deductions (Old Regime)

• Section 80C: Up to Rs 1.5 lakh (PPF, ELSS, life insurance, children's tuition)
• Section 80D: Health insurance premium for HUF members
• Section 80G: Donations to eligible charities
• Section 24(b): Home loan interest deduction on HUF property
• Section 80TTA: Up to Rs 10,000 savings account interest deduction

5 Common Mistakes

1. Assuming HUF gets the Rs 12L zero-tax benefit — it doesn't. Section 87A doesn't apply to HUF.
2. Transferring salary income to HUF — clubbing provisions under Section 64 will add it back to your income.
3. Not maintaining separate books — HUF is a separate entity. Mix personal and HUF transactions and you invite scrutiny.
4. Forgetting to file HUF's ITR — even if HUF has income below the exemption limit, it's good practice to file. Mandatory if income exceeds Rs 2.5L (old) or Rs 3L (new).
5. Creating HUF just for tax saving without real HUF-eligible assets — if the structure is artificial, the department can challenge it.