What is a Hindu Undivided Family (HUF)?
A Hindu Undivided Family (HUF) is a separate legal entity recognised under the Income Tax Act, 1961. It consists of individuals who are lineally descended from a common ancestor, including their spouses and unmarried daughters.
An HUF is automatically created in a Hindu family and does not require a formal agreement. However, to avail tax benefits and comply with tax laws, the HUF must obtain a separate PAN card and maintain a separate bank account.
The oldest member of the family usually acts as the Karta of the HUF and manages its financial and tax-related matters.
For income tax purposes:
- The HUF and its members are taxed separately
- The HUF gets a separate basic exemption limit
- It can claim deductions under various sections of the Income Tax Act
- It must file a separate ITR if applicable
Is Filing ITR Mandatory for an HUF?
Yes, an HUF must file an Income Tax Return if its total income exceeds the basic exemption limit during the financial year.
Apart from this, filing may also become mandatory in certain situations, such as:
- The HUF wants to claim a tax refund
- It wishes to carry forward losses
- It enters into specified high-value transactions
- TDS has been deducted from its income
- It owns foreign assets or earns foreign income in specified cases
Even when filing is not mandatory, many HUFs still file returns to maintain proper financial records and simplify future loan or compliance requirements.
Choosing the correct ITR form is one of the most important parts of HUF tax filing. The applicable form depends on the nature of income earned by the HUF.
| Nature of Income |
Applicable ITR Form |
When to File? |
| Income from house property, capital gains, or other sources |
ITR-2 |
when the HUF earns income from:
- House property
- Capital gains
- Other sources such as interest income
- Foreign assets or foreign income
|
| Income from business or profession |
ITR-3 |
ITR-3 is applicable if the HUF earns:
- Business income
- Professional income
- Income from trading activities
- Income from partnership firms
|
| Presumptive business income under Sections 44AD, 44ADA, or 44AE |
ITR-4 |
An HUF can file ITR-4 if:
- It is a resident HUF
- Total income does not exceed ₹50 lakh
- Business income is declared under presumptive taxation schemes
|
Note: An HUF cannot file ITR-1 (Sahaj).
Documents Required to File HUF Income Tax Return
Before starting the filing process, keep the following documents ready:
- PAN card of the HUF
- Aadhaar card of the Karta
- Bank account details and statements
- Form 26AS
- Annual Information Statement (AIS)
- TDS certificates
- Investment proofs
- Rental income documents
- Capital gains statements
- Business financial statements, if applicable
- Tax audit report, if applicable
Keeping these documents ready in advance helps avoid errors during filing.
Prerequisites for Filing HUF Income Tax Return
Before filing the return, ensure that:
- The HUF has an active PAN
- The HUF is registered on the income tax e-filing portal
- The bank account is pre-validated
- Mobile number and email ID are updated
- DSC is registered where mandatory
The HUF should also maintain separate financial records from individual family members to avoid reporting errors.
How to File an Income Tax Return for HUF Online?
If you have a little bit of knowledge about taxes, entering some basic details will let you file the ITR within 4 minutes. Tax2win DIY platform is AI-integrated, hence it will auto-select the right ITR form for you itself and thus makes filing super-easy for you. The user interface is friendly and easy. Hands-on today to file ITR for FY 2025-26 and e-verify on time.
If you are wondering how to file an ITR with Tax2win, here are some simple steps you need to follow -
- Step 1: Either sign in to the tax2win website using your existing credentials or sign up to the portal and create an account. You can do self-filing only in the case of income from salary, business, and capital gains. Click on “File ITR Now”.
- Step 2: After logging in, a table consisting of all the possible sources of income opens. You need to select the income sources that you have. Based on your sources of income, Tax2win’s DIY ITR filing system selects the applicable ITR form automatically.
- Step 3. You need to upload Form 16. In case you don’t have Form 16, you can simply skip the option and proceed further.
- Step 4. Select the F.Y. and enter the PAN Details and DOB. (If you don’t have a registered account with the Income Tax Department, you will receive an OTP, and a new account will be created. You can also choose if you want our DIY software to fetch your personal details and get data pre-filled.
- Step 5: Enter a few basic details in the next step. Some of it is pre-filled from the Income Tax Department’s database. Remember to cross-check the information available. As shown in the image given below, you have to enter your personal details like name, email ID, date of birth, father’s name, gender, etc.
- Step 6: In the next step, you have to provide your address details and employer category. You can refer to the image below to understand this better.
- Step 7: In the next step, you have to fill in your employment details. The standard deduction is applied automatically in the case of salaried employees. As shown in the image below, you have to enter your gross salary/CTC, exempted allowances like HRA, LTA, gratuity, net salary, standard deduction, and professional tax under section 16. Note that if you have uploaded Form 16, your employment data will be pre-filled in the ITR Form. All you have to do is verify the information and proceed to file the ITR.
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Step 8: If you have capital gains income, you need to select ‘Income from capital gains (shares, Mutual Funds, Property, etc) while selecting the source of income. Navigate to the ‘Capital Gain Income’ tab from the top of the page and upload the P&L statement.
Here’s an example of how to upload the Groww P&L statement -
- Click on ‘Groww.’
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From the pop-up window, click on Browse Files and upload the P&L statement.
Note: If your brokerage or fund house is not supported, you can upload your details using the Tax2win Template.
Here’s how to download the Tax2win template -
- Click on the Tax2win Template.
- Click the 'Download Tax2win Template' button in the first step to download the template.
- Fill in your capital gain investment details as instructed in the template. Then, upload the completed template by clicking the 'Browse Files' button. Tax2win will read your transactions and calculate your capital gains details within minutes.
- Step 9: Enter the details of the investment made during the year to calculate the applicable deductions. You have to enter details of investments in PPF, LIC, PF, housing loan, FDR, NSC, tuition fees, premiums paid to the annuity, and other 80C deductions. Also, you can claim deductions like 80D, 80CCD (1B), 80G, etc.
- Step 10: In this step, you are required to enter your bank details. Enter your IFSC code, name of the bank, account number, and Aadhaar details. As per government law, it is mandatory to show all the bank details. You can select one account as the primary account. Remember, you will get a tax refund in your primary bank account.
- Step 11: In this step, you have to upload Form 26AS, and your TDS details will be auto-populated. If you don’t have Form 26AS, you can skip it and fill in the details manually before filing your ITR. If you have paid the tax, select yes on Advance Tax and self-assessment tax paid, enter the challan details, and click on Continue.
- Step 12: Select the return filing type. If it is your first time filing ITR for the relevant assessment year, then select original return and click on continue.
- Step 13: Based on the information given by you in the previous sections, the software automatically computes your tax liability using both the old and the new regime. You can compare both regimes and select the one that is more beneficial for you.
- Step 14: You can use any of the methods mentioned above to e-verify your ITR. If you have already e-verified your ITR, click on Already e-verified.
- Step 15: A code will be sent to the mobile number linked to your Aadhaar. Enter the EVC and verify your return. You also have the option to change the e-verification method here.
- Step 16: Once you enter the EVC, your ITR will be e-verified successfully.
Deductions Available to an HUF While Filing ITR
| Section |
Deduction / Exemption |
Maximum Limit |
| 80C |
LIC premium, ELSS, PPF, tax-saving FD, NSC, principal repayment of home loan, stamp duty & registration charges |
₹1.5 lakh |
| 80D |
Health insurance premium for HUF members |
₹25,000 / ₹50,000 for senior citizens |
| 80DD |
Medical treatment and maintenance of a disabled dependent member |
₹75,000 (40-80% disability) / ₹1.25 lakh (more than 80%) |
| 80DDB |
Treatment of specified diseases |
₹40,000 / ₹1 lakh for senior citizens |
| 80G |
Donations to eligible charitable institutions and relief funds |
Depends on institution |
| 80GGA |
Donations for scientific research or rural development |
Subject to conditions |
| 24(b) |
Interest paid on housing loan |
₹2 lakh for self-occupied property |
| 54 |
Exemption on capital gains from the sale of a residential house if reinvested |
Subject to the investment amount |
| 54B |
Exemption on sale of agricultural land if another agricultural land is purchased |
Subject to conditions |
| 54D |
Exemption on compulsory acquisition of industrial undertaking assets |
Subject to conditions |
| 54EC |
Investment in specified capital gains bonds (NHAI/REC) |
₹50 lakh |
| 54F |
Exemption on the sale of a long-term capital asset other than house property |
Subject to conditions |
| 54G |
Exemption from shifting an industrial undertaking from an urban area |
Subject to conditions |
| 10(1) |
Agricultural income exemption |
Fully exempt subject to conditions |
| 112A |
Concessional taxation on LTCG from listed equity shares and equity mutual funds |
As per applicable limits |
| Carry Forward of Losses |
Carry forward of house property, business, and capital losses |
Subject to timely filing |
Benefits of Filing Income Tax Return for HUF
Filing Income Tax Return for an HUF offers several advantages, including:
- Separate tax exemption limit
- Additional deduction benefits
- Better tax planning opportunities
- Easier loan and financial approvals
- Proper financial documentation
- Faster refund claims
- Carry forward of losses
A properly managed HUF structure can help families reduce their overall tax burden legally.
Creating an HUF can help families manage income, investments, and assets more efficiently while also offering separate tax benefits under the Income Tax Act. If you want to create an HUF and need help with registration, PAN application, or documentation, connect with our tax experts today and get complete assistance from start to finish. Connect with Tax2win Experts Now!
