Income Tax Slab for HUF

Introduction

A taxpayer who has HUF registration or wishes to obtain HUF registration/HUF PAN card should first know what the income tax slab for HUF is. Since HUF has a separate PAN card, the tax on income earned by HUF is also calculated separately from the income of its Karta. A separate income tax return (ITR) is submitted for the HUF. The greatest advantage in this situation is that the income tax slab set for an individual is likewise relevant for the HUF. The primary goal of HUF registration is to save income tax. In the present day, numerous individuals generate earnings from various sources and seek to minimize the taxes on their income. For instance, an individual receives an income tax slab for HUF from their salary while employed in an office, but concurrently, they are also generating income from the stock market, rental properties, or bank interest. In this scenario, they must pay taxes on the earnings obtained from every source. In this scenario, HUF registration is a favorable choice. Since HUF is not eligible to receive a salary, one can obtain HUF registration and transfer the income earned from other sources through HUF and reduce their income tax. This is feasible because, according to the income tax slab for HUF, a specific amount has been determined for which an exemption is granted; if the person’s or HUF’s income does not exceed that amount, they qualify to pay no income tax slab for HUF.

Income Tax Regime for HUF

According to the Finance Act, taxpayers can select either the old or the new tax regime according to their preference when submitting their income tax return (ITR). The income tax slabs and income tax rates of both tax regimes are different from each other. Therefore, the taxpayer is free to choose the tax regime in which the tax savings are higher. Although the New Tax Regime is selected by default when the income tax return is filed, if a taxpayer believes they can reduce their tax liability by opting for the old regime, they have the option to switch to it. Nonetheless, tax specialists predict that the government is advancing the new tax regime, and the old tax regime is anticipated to be eliminated in a few years.

The Union Budget for the Tax Year 2025-2026 was presented on 1st February 2025 by the Hon’ble Finance Minister Smt. Nirmala Sitharaman. In it, numerous alterations have been implemented in the income tax slab for HUF and rates following the new tax regime, drawing significant attention from taxpayers. Simultaneously, no alterations have been observed in the old tax regime.