top of page
  • Writer's pictureBrain Booster Articles


Author: Arsheiya Munjal, III year of B.Com., LL.B.(Hons.) from Amity Law School, Noida. Amity University.


The system of Hindu Undivided Family or Hindu Joint Family is a prevailing tradition in India. Under Hindu Law, a family which consists of all persons lineally descended from a common ancestor, including their wives and daughters, is a Hindu Undivided Family[i] (hereafter referred to as “HUF”). These joint families have a head or a manager who is the oldest member of the family, known as the Karta. The karta’s descendants are co-parceners and they have a right to their ancestral property when born. A HUF is formed by pooling in the assets of all the co-parceners as a joint family and making a separate business entity. Up to 4 levels[ii] of lineal descendants, all family members are considered to be co-parceners, while other relatives are considered members of the joint family. In 2016, the Delhi High Court set precedent in a landmark judgement[iii], allowing the eldest female of the HUF to be the Karta of the family. HUFs are governed by the Hindu Succession Act, 1956, which was codified as a part of the Hindu Code Bills. Interestingly, Section 2(b) of the Hindu Succession Act, 1956, states that aHUF can only be formed by Hindus, Sikhs, Jains and Buddhists.

The formation of a HUF is pretty straightforward as it is automatically created at the time of marriage. Once married, the wives can only be a member of the joint family, and any kids would be co-parceners when born. The joint family should also have assets such as gifts, will or an ancestral property as capital and they all must share a house, food and a place of worship according to the principle of “spindaship”[iv]. A HUF must also be registered with a legal deed and have a separate bank account[v] to count as a separate legal identity. Once registered, it will continue to be a HUF until partition.


Under Section 2 (31)[vi] of the Income Tax Act, 1961 (hereafter referred to as the “IT Act”) a HUF is a joint family which is considered as a separate entity from that of their members. Furthermore, Section 10 of the IT Act[vii] states that a joint family has their separate income which is taxed, and the income of its members is not included in that total income.

The income for a HUF is assessed by the Income Tax department if two basic conditions[viii] are met. These are:

- There must be coparceners in the family

- They must have a joint family property. This can be an ancestral property, an aid in the form of ancestral property or property transferred by members.

Once these two conditions are met, the joint family gets a separate PAN card and is considered as aHUFby the income tax department until partition. This allows them to receive benefits of income tax slab rates and tax exemptions as an individual would and hence save tax money legally. A HUF is exempted from paying tax if their net income is up to ₹2,50,000. After this, the net income is charged progressively, at 5% till an income of ₹5,00,000, 20% till an income of ₹10,00,000 and 30% on an income above it. This can be seen in a tabular form below:

TABLE 1[ix]

In addition to this, a HUF can, under Section 80C of the IT Act[x], benefit from deductions of tax. This section is only available for individuals and HUFs, not for corporate bodies, partnership firms or any other businesses. Under this section, a maximum of ₹1,50,000 can be deducted in respect of certain payments. Some of these payments include:

· Life Insurance: Premium paid towards life insurance are eligible to get tax returns. These policies could be for self, spouse, children or anyone in the joint family.

· Investment in funds such as EPF, PPF etc.: Any contribution towards the few mentioned investment funds will be eligible for tax deduction under this section. The Public Provident Fund (PPF) has a deposit limit of ₹1,50,000 which allows the investor to claim tax refund against the whole amount.

· Home Loans: If a HUF has more than one self-acquired property, it is legally possible for them to claim only one, and for the rest to be “deemed to be let out”. This allows them to pay tax for the only property, while for the rest tax would be given for the notional rent only.

· Infrastructure bonds: On any investment above ₹20,000, the government allows exemption on infrastructure bonds.

· Stamp duty and registration charges: As long as these duties have been made, under this section, the government allows a deduction of tax until the limit prescribed.

These benefits are just the tip of the iceberg, and if a family starts a HUF to save tax money, there are a plethora of such exceptions and benefits available to them. While the mentioned tax deductions only come within section 80C of the act, a HUF can enjoy benefits given to them from sections 80C to 80U of the IT Act[xi]. When compared to this, other business entities, such as companies and partnerships receive almost no benefits. Like a HUF, companies are also considered to be a separate legal identity, but some of the only tax benefits[xii] received by them is the transfer of capital not always being treated as a transfer, deduction in setting up expenses, reduced tax on dividends etc. A clear discriminatory difference can be seen between the tax benefits given to HUFs and other companies.

Moreover, sociologists say there has been an increase in nuclear families and a decrease in the joint family system[xiii]in India. According to this information, the number of HUF entities should relatively be decreasing every year as all HUFs must follow the principle of “spindaship”, even though co-parceners may own separate properties. Interestingly, the income tax department shows contrasting information:


The data collected from the Income Tax department clearly shows how the number of returns filed by HUFs has increased over the years from 9,98,878 to 11,30,554, disclosing a 13.18% increase in HUF business entities. With this increase, the sum of gross total income has also increased, as has the payable tax. However, the total sum of the payable tax is minimal compared to how much would be paid by any other business entity because of all the tax benefits available to HUFs. The data clearly shows that the total tax paid according to the income declared under the HUF system is less than 10%. If the regimen of HUF was to be abolished, the government could see a jump of around 20%[xviii] in total tax collected from the assets held by HUFs.


The preamble in the Constitution of India[xix] states:

“WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN, SOCIALIST, SECULAR, DEMOCRATIC, REPUBLIC and to secure all its citizens:

JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and opportunity; and to promote among them all

FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation”

Articles 14 to 18[xx] of the Constitution of India talks about the right to equality which is available to every citizen of the country, despite their religion. This includes “equality before the law” and the “prohibition of discrimination on grounds of religion, race, caste, sex, or place of birth.” However, it must be noted that the option of forming a HUF is only open to four religions. Section 2(c) of the Hindu Succession Act[xxi] goes on to say that the act may apply to “any other person who is not a Muslim, Christian, Parsi, or Jew by religion”. This makes it difficult for religious minorities to make a living in the country, given that they do not benefit from the same tax exemptions as Hindus, Sikhs, Jains and Buddhists. The fact that HUF is a tradition in India does not diminish the fact that some religions can use this opportunity just to save tax money which should belong to the government, while other religions cannot. It simply goes against the preamble promising “Equality of status and opportunity”. Not only is this a clear violation of the preamble, but also the right to equality under Article 14 and is causing grave injustice towards the religious minorities of the country and threatening the secularism of the country.

Furthermore, Article 44[xxii] within the Directive Principles of State Policy in Part IV of The Constitution of India contains the “Uniform Civil Code” clause and stipulates that“the state shall endeavour to secure for the citizens a Uniform Civil Code throughout the territory of India”. The objective of a Uniform Civil Code is to address discrimination against the vulnerable and diverse religious groups in India. However, The Hindu Code Bill, which codifies Hindu personal laws such as The Hindu Succession Act, 1956, plays an immense role in abandoning the objective of a uniform civil code given in the Constitution.

The only state in India where equality and uniformity are already practised in Kerala. The state government introduced the Kerala Joint Family System (Abolition) Act, 1975.[xxiii]And was brought into force on 1st December 1975 as an independent statue, not an amendment to the Hindu Succession Act. It abolishes the joint family system among all Hindus, Sikhs, Jains and Buddhists in Kerala. To give an outline of this act, it states that after its commencement any birth in the family would not give the child a right to the property, and every existing co-parcener will hold their property as if the property has been partitioned or as if they are a tenant-in-common. The legislature also abrogated the doctrine of pious obligation, so no son would have to pay their father’s debt.


Mahatma Gandhi once said, “An unjust law itself is a species of violence”.The Republic of India has been a part of this violence since Independence under the façade of HUF. The joint family system is losing relevance[xxiv] and due to increased fights and disputes between relatives’ nuclear families and divorce rates are both increasing, changing the nature of Indian families. Even though HUF was codified into Indian law to keep the tradition alive, in today’s world it has become nothing but a mere tool to save tax money. Unfortunately, this tool is discriminatorily allowed in India and poses a threat to India’s secularism. It should also be noted that unless a HUF is formed, no other family business formed by a religious minority or other business entities has the opportunity to save tax money in the same way. Together, these are the things threatening the Constitution’s promise of Secularism, Liberty of faith and worship, Equality of opportunity and the Right to Equality. It is time that the states of India realize that it is their fundamental duty to abide by the Constitution of India and make sure that every citizen gets an equal opportunity, to make sure that there is no discrimination against religious minorities and to take a step and follow the path the Government of Kerela did, to reach equality and true secularism.

1 comentário

06 de nov. de 2021

In the event that the card is hindered because of some unacceptable ATM Pin entered multiple occasions you should illuminate the bank about this how to unblock icici debit card. Additionally, the bank will give you another Pin for the card and from that point onward, you need to unblock the card to utilize it with the new pin gave. You can just utilize Net banking or the iMobile use of ICICI bank to hinder or unblock your ICICI bank charge/ATM card online from home.

bottom of page