Hindu Undivided Family or HUF is a legal entity recognized as ‘an individual’ under the income tax laws of India. Under this belief, an undivided Hindu family is considered a single unit for tax purposes.
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It is being said that ‘Hindu Undivided Family’ has been excluded from the Uniform Civil Code of Uttarakhand. But is it true? What does UCC of Uttarakhand say on this subject? The Uniform Civil Code (UCC) Bill brought by BJP’s Pushkar Singh Dhami government in Uttarakhand has been passed by the state assembly. After this, it will become a law after getting the permission of the Governor and then the President of India.
All the provisions of the law will be applicable to all the people living in Uttarakhand. Apart from this, they will also be applicable to all registered citizens of Uttarakhand, even if they live in any other state.
What is “Hindu Undivided Family”
But some people have alleged that it is a communal law, rather a “Hindu code”. MP and AIMIM party president Asaduddin Owaisi has claimed that “Hindu Undivided Family” has not been brought under the ambit of this UCC. Let us tell you, “Hindu Undivided Family” or HUF is a legal entity which is recognized as ‘an individual’ under the Income Tax law of India. Under this belief, an undivided Hindu family is considered a single unit for tax purposes.
HUF is considered to be a family in which all the members are direct descendants of a common ancestor. This also includes their wives and unmarried daughters. HUF has its own PAN number and tax is paid separately from it. It also gets special exemption in assessment of taxes if certain conditions of Income Tax Law are fulfilled. HUF is often used by Hindu families to increase their wealth. Often families who own ancestral property and business take a separate PAN number under a HUF.
By doing this, these assets and business income are assessed separately for paying tax. By doing this the ‘tax liability’ of the family is reduced.
impact of ucc
The senior most member of such a family or the head of the family is called the ‘Karta’, who manages all its affairs. Other members are called ‘contributors’. Under Income Tax Law, HUF does not need to be formed through any contract, rather it is considered to be formed automatically. Jain and Sikh families also get recognition as HUF under this law. HUFs are also useful in taking succession decisions. HUFs are not addressed separately in the UCC of Uttarakhand, meaning that it can be assumed that HUFs are covered under the UCC.
According to an article published on the website of Indian Express, when the UCC of Uttarakhand becomes law, it is possible that its provisions will be considered over the Hindu Succession Act (HSA). Under the HSA, the ‘coparcenary’ also gets rights on the property, but there is no mention of ‘coparcenary’ in the UCC. Under an HSA, a co-parcener cannot sell the property through a will. This ensures daughters’ rights in property. According to this article of Indian Express, daughters will not be able to get this protection under UCC.
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