Neeraj Walia is head of family consisting of his wife and two sons. Fore-fathers of Neeraj Walia have accumulated huge wealth in the form of land and immovable properties. Now, with the ancestral wealth Neeraj Walia plan

Key points in creation of HUF: Under Income Tax Act, an HUF is a separate entity for the purpose of income tax return. The same tax slabs are applicable to HUF as to an individual assessee. One cannot transfer his own assets / money into HUF. If one has ancestral property and earning some income from this property, then it is better to transfer this asset to HUF and save tax up to exemption limit applicable to individual. One can transfer the money received on sale of ancestral property / assets into HUF. The income from property of HUF can be further invested in instruments such as shares, mutual funds, etc. and will be assessed under HUF. Existence of property or multiple members is not a pre-requisite to create HUF. A family which does not own any property may still have the character of HUF. This jointness is understood in terms of faith and food. This is because a Hindu is born as a member of the joint family. Any gifts received by the members of HUF (birthday, marriage etc.) can be treated as assets of HUF. The HUF is taxable as separate person under income tax hence one can save tax from basic exemption of ₹2.5 lakh. HUF will also gain from the tax slab structure of computing income tax. Apart from basic exemption of ₹2.50 lakh, Section 80C deduction upto ₹1.5 lakh is also available.