Comprehensive Guide to Tax Deductions for HUFs Under Chapter VI-A for AY 2024-25

[RAHUL MODI]

Tax planning is an essential aspect of managing finances for Hindu Undivided Families (HUFs). For the Assessment Year (AY) 2024-25, various deductions are available under Chapter VI-A of the Income Tax Act, 1961. This article provides a detailed overview of these deductions, enabling HUFs to optimize their tax savings effectively.

Section 80C: Popular Tax-Saving Investments

HUFs can claim deductions up to ₹1,50,000 under Section 80C on specific investments and expenditures. Key options include:

• Life Insurance Premiums: Premiums paid for life insurance policies for any member of the HUF.
• National Savings Certificates (NSC): Investments in NSCs.
• Equity Linked Savings Scheme (ELSS): Investments in specified mutual funds.
• Principal Repayment on Housing Loan: Principal repayment on loans taken for buying or constructing a residential property.
• Fixed Deposits: Tax-saving fixed deposits with a tenure of 5 years or more.

It is important to note that contributions to the Public Provident Fund (PPF) are not available for HUFs. HUFs cannot open new PPF accounts, and existing ones are not eligible for further contributions.

Section 80D: Health Insurance Premiums

Premiums paid for health insurance for family and HUF members qualify for deductions under Section 80D:

• Basic Deduction: Up to ₹25,000 for premiums paid for any member of the HUF.
• Senior Citizens: An additional ₹50,000 if the insured member is a senior citizen.

Section 80DD: Maintenance of Disabled Dependents

This section provides deductions for expenses incurred on the maintenance and medical treatment of a dependent with a disability:

• Regular Disability: Up to ₹75,000.
• Severe Disability: Up to ₹1,25,000.

Section 80DDB: Treatment of Specified Diseases

Expenses for the medical treatment of specified diseases can be claimed under Section 80DDB:

• Basic Deduction: Up to ₹40,000.
• Senior Citizens: Up to ₹1,00,000.

Section 80G: Donations to Charitable Institutions

Deductions under Section 80G are available for donations made to specified funds and charitable institutions. The deduction percentage (50% or 100%) depends on the specific institution and fund.

Section 80GGA: Donations for Scientific Research or Rural Development

Donations made for scientific research or rural development are eligible for deductions under Section 80GGA.

Section 80GGB: Contributions to Political Parties

Contributions made to political parties or electoral trusts can be claimed as deductions under Section 80GGB.

Section 80TTA: Interest on Savings Bank Accounts

Interest earned from savings accounts can be deducted up to ₹10,000 under Section 80TTA.

Section 80U: Person with Disability

HUFs with a member who has a disability can claim deductions under Section 80U:

• Regular Disability: Up to ₹75,000.
• Severe Disability: Up to ₹1,25,000.

Conclusion: Maximizing Tax Savings

By understanding and utilizing these deductions, HUFs can significantly reduce their taxable income and save on taxes. Each section has specific conditions and requirements, making it crucial to review them in detail or consult with a tax professional to ensure eligibility and proper claiming of deductions.