The number of Hindu Undivided Families (HUFs) availing tax benefits under the Income Tax Act stood at almost 8.76 lakh in 2022-23, the lowest in at least five years. The impact on their tax treatment under a Uniform Civil Code (UCC) has not yet been examined, the Finance Ministry informed Parliament on July 25.
Responding to a query on whether the Government has assessed the impact of Uniform Civil Code on tax benefits to HUFs in the country from Janata Dal MP Ram Nath Thakur, Minister of State for Finance Pankaj Choudhary said there has been no such assessment “as there is no such Code at present.”
Under the Income Tax Act, an HUF is treated as a ‘person’ and is assigned a separate entity for the purpose of assessment. Under Hindu Law, an HUF is a family which consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. Jain and Sikh families, even though they are not governed by the Hindu Law, are also treated as HUFs under the Act.
While there were more than 9.25 lakh HUFs who availed tax benefits in 2020-21, this number dropped to around 8.77 lakh in 2021-22 and further to a little under 8.76 lakh families last year.
Published - July 26, 2023 01:07 pm IST
