Families in India often oversee their fortune collectively throughout several generations. According to the Income Tax Act, the Hindu Undivided family (HUF) is a recognized legal entity that permits families to store money on taxes through combining assets and filing returns independently of individual members. Comprehending the HUF tax slabs, deductions, and submission regulations is important for taxpayers seeking powerful tax practice in FY 2025–2026. This weblog discusses the taxation of HUFs, the relevant profits tax slabs for FY 2025–2026, the viable deductions, and beneficial advice for properly filing returns.

What is a Hindu Undivided Family (HUF)?

According to Hindu law, a Hindu Undivided family (HUF) is a legal entity that permits a family to manage sources and profits as a single unit. It's often led by the Karta, who is frequently the oldest man; however, modern-day guidelines permit the oldest lady to assume this position as well. Members of the structure are entitled to renovation and assistance from the family fortune, while coparceners, who are direct descendants, have the power to seek partition. The HUF appears as an extraordinary assessee from its individual contributors for tax motives. It could create bank bills, personal belongings, and generate sales on its own; it also has to have its own PAN. families have an extra way to decrease their tax obligations for the reason that income from property owned by means of the HUF is taxed one at a time. Due to this, the HUF is not just a traditional family unit but also a beneficial device for tax planning and asset preservation.

Secure your family’s wealth – Open a HUF Demat Account now!

Income Tax Slabs for HUF in FY 2025–26

HUFs are taxed similarly to individuals under the old and new tax regimes.

HUF Income Tax Slabs – Old Regime (FY 2025–26)

• Rebate under Section 87A is available only if the total income ≤ ₹5 lakh.

• Surcharge and cess apply as per rules.

Table 2: HUF Income Tax Slabs – New Regime (FY 2025–26)

• Rebate under Section 87A is available if the total income ≤ ₹7 lakh.

• Lower tax rates, but limited deductions allowed.

Deductions Available for HUF

HUFs enjoy many of the same deductions as individual taxpayers under the old regime.

Key Deductions for HUF

Note: Deduction limits are shared by the HUF as a unit, not by individual members.

Filing Tips for HUF in FY 2025–26

Benefits & Limitations of HUF

Example of HUF Tax Saving

Suppose an HUF earns ₹12 lakh annually.

• Under the old regime: Taxable income = ₹12 lakh – ₹1.5 lakh (80C) – ₹25,000 (80D) = ₹10.25 lakh.
  Tax = ₹1,12,500 + 30% of ₹25,000 = ₹1,20,000 approx.

• Under the new regime: Taxable income = ₹12 lakh.
  Tax = As per slabs = ₹90,000 + 15% of ₹0 + 20% of ₹0 = ~₹90,000.

Thus, the choice of regime depends on available deductions.

Final Filing Checklist for HUFs (FY 2025–26)

• PAN and HUF deed ready.

• Separate bank account maintained.

• Income sources are clearly segregated.

• Deductions under the old regime maximized if opted.

• Correct ITR form selected.

Conclusion

In India, the Hindu Undivided family (HUF) continues to be a useful tool for tax planning. Depending on their deductions, HUFs can choose among the present and new tax regimes for FY 2025–2026. Families might also lawfully limit their tax responsibilities at the same time as safeguarding wealth for future generations by retaining accurate statistics, utilising qualified deductions, and submitting their paperwork on time.

Read More - What is HUF | HUF Demat Account | Individual vs HUF | HUF Registration | Benefits & Drawback of HUF | HUF Tax Benefits | HUF Tax saving