The implications of Uniform Civil Code for taxation and inheritance
₹1.5 lakh, home loan, deduction on mediclaim premium paid for its members, reinvesting capital gains in prescribed avenues to get exemption, etc). An HUF can run its own business to generate income and claim all applicable exemptions and deductions that an individual is entitled to.
If the UCC is implemented, the separate ‘person’ status of an HUF may no longer continue. It will affect lakhs of HUFs currently filing their returns of income in India, and availing the benefits of various tax deductions and exemptions.
Parliament will be required to make relevant amendments in numerous sections of the Income Tax Act, in respect of the legal person status and taxability of HUFs. It will also create some administrative difficulties for the tax administration authorities concerning the rolling back of PAN numbers of existing HUFs.
Thus, the UCC is going to have its fair share of tax implications too, which need to be addressed carefully by policymakers. Mayank Mohanka is the founder of TaxAaram India and a partner at S M Mohanka & Associates.
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