A PAN card is an essential document for all Indians including Hindu Undivided Families (HUF). The HUF Pan Card allows them to open a bank account, and make financial transactions.
Moreover, with the help of a HUF Pan Card, the HUF families are able to avail themselves of tax benefits and buy property.
What is HUF Pan Card?
HUF stands for Hindu Undivided Families and this pan card grants them several tax benefits. A Hindu family can apply for a HUF pan card although it is not limited to them only.
Sikhs, Buddhists, and Jains can also have pan cards for Huf. With the help of this pan card, you can save taxes by making a family unit.
Furthermore, the Income-tax department takes taxes on the behalf of each individual in the family unit.
HUF Pan Card Eligibility / Who can apply for HUF Pan Card?
The eligibility criteria have three roots for the person who is eligible for HUF. It covers these three main steps to have a pan card for HUF.
Here are the following eligibility aspects:
1. Hindu Only
To have a HUF pan card it is important to be Hindu, Sikh, Jain, or Buddhist. This is the basic requirement of having it. Moreover, Hindu families can avail of the benefits through this card.
2. Creating an Entity
Having an ancestral property, any gifts from relatives, or a will can help to create a corpus or entity. You can create the deed once you have a corpus.
3. Stamping the Deed
The deed is a stamped document that contains the name of the Karta, coparceners, and the candidates. In addition, the deed also contains the source of income, address, and bank details. It is basically a declaration by the Karta on the behalf of all the members that are included to make financial transactions.
Documents Required for HUF Pan Card Application
The applicant has to provide some documents to their application.
Here is the list of the Huf pan card requirements:
- Name of the HUF
- Complete address and proof of residence
- Copy of Karta’s Aadhaar card
- Copy of driving license or passport
- Copy of voter ID of Karta
- Copy of ration card
- Source of income
- The names, father’s names, and addresses of each member of HUF
- Signature of Karta on the form 49A
How to Apply for HUF Pan Card? Step by Step Procedure
You can use the online application method to apply for a Huf pan card. It is a simple and quick process.
Here are the steps:
- Head to the official website of UTIITSL or NSDL
- Click on “Apply online”
- Fill in all the required fields and attach the necessary documents and submit it
You can also apply offline by visiting the nearest pan center. For this purpose, you have to download form 49A or take one from the pan center. Fill out the form and attach the documents and submit it by hand.
Benefits of HUF Pan Card
There are a number of benefits. The most important benefit that the Hindu undivided families get is taxes.
Here are some important benefits:
- One of the major advantages is that the family can have an additional pan card. This way they can split the income and thus they can reduce the tax outgo.
- A HUF enjoys the benefit of owning a residential house without paying tax. According to income tax section 80C, a HUF pan cardholder can claim a home loan. Moreover, the HUF can also avail of tax benefits up to 1.5 lakh.
- A HUF is able to make investments in tax-saving and ELSS to earn tax benefits of around 1.5 lakh.
- It allows the cardholder to have tax benefits on various payments they make during the year. Furthermore, a HUF can pay life insurance for each member of the family and can claim tax benefits.
- A person without HUF can only claim 25,000 for health insurance every year. While the HUF provides an additional 25,000 per year for health insurance coverage for your family.
Disadvantages of HUF Pan Card
Here are some of the disadvantages:
- One of the common disadvantages is that the members share an equal part in the property. Moreover, as the family members increase by birth or by marriage they also become a part of the Huf.
- Breaking up a HUF is a long problematic and lawful procedure. It requires the consent of all the members that include in it. It can only be broken by parcel.
- Once a HUF is framed the inquiry officials keep on recording its expense forms until a segment happens.
A HUF pan card provides many privileges to Hindu undivided families. With the help of it, each family member enjoys several tax benefits. Apart from that, they also avail of health insurance benefits, tax benefits, home loan benefits, and more.
Moreover, the income tax department equally distributes the tax amount to all the members of the family and they can have HUF as an additional pan card. This is also helpful to increase the tax outgo.