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Let us consider the main aspects which need to be borne in mind in saving tax through HUF status.
Two schools of Hindu law
In India, Hindus are mainly governed by two schools of law, namely Mitakshara and Dayabhagh. In some parts of India, particularly in south India, certain other systems are also prevalent.
The Dayabhagh system is especially prevalent in West Bengal and Assam, whereas for the rest of country for most of the Hindus the law relating to the ownership, devolution, etc. of properties is the Mitakshara School of Hindu Law.
Generally speaking, under the Mitakshara School of Hindu Law the main principle is the survivorship principle in the matter of devolution of the ancestral or HUF property, in contrast to the principle of succession which applies to the individual property of a Hindu...
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