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HUFs claimed tax deductions worth Rs 3,803 crore in 2022-23, according to the Finance Ministry

Jul 26, 2023

By: BlinkX Research Team

During the fiscal year 2022-23, more than 8.75 lakh Hindu Undivided Families (HUFs) filed income tax returns (ITRs) and claimed deductions totaling Rs 3,803 crore, as reported by the Finance Ministry. Minister of State for Finance, Pankaj Chaudhary, provided details of the number of HUFs availing tax benefits under Chapter VIA of the Income-tax Act in the last five years.

When asked about the impact of the Uniform Civil Code on tax benefits for HUFs, the minister stated that no such assessment has been made as the Code is not currently in effect.

Under Hindu Law, HUF refers to a family that includes all lineal descendants of a common ancestor, including wives and unmarried daughters, and this provision also extends to Jain and Sikh families.

HUFs are granted 'legal person' status under the Income Tax Act, allowing them to claim tax deductions under Chapter VI-A. They are taxed at the same rate as individuals and can avail of applicable deductions.

In the fiscal year 2022-23, 8,75,948 HUFs claimed deductions worth Rs 3,802.86 crore, while in 2021-22, 8,77,303 HUFs claimed deductions worth Rs 3,745.51 crore. The numbers for previous fiscal years are as follows: over 9.25 lakh and 9.02 lakh HUFs claimed deductions of Rs 4,173 crore and Rs 4,161 crore in 2020-21 and 2019-20, respectively, and over 8.84 lakh HUFs claimed deductions worth Rs 4,044 crore in 2018-19.

Content source: Media reports