Will Uniform Civil Code impact tax benefits of Hindu Undivided Families? Finance Ministry responds

financialexpress.com:

While the Uniform Civil Code (UCC) is in the news these days, the Government has not done any assessment of how UCC is going to impact the tax benefits provided to Hindu Undivided Families (HUFs). More so, because there is no such Code at present.

Replying to a query in Rajya Sabha on whether the Government has assessed the impact of the Uniform Civil Code on tax benefits to HUFs in the country, Union Minister of State for Finance Pankaj Chaudhary said, “No such assessment has been made as there is no such Code at present.”

While the UCC has become a political hot topic ahead of the 2024 General Elections, no concrete proposal related to the common civil code for all citizens has come up from the Government yet.

In June this year, however, the Law Commission of India (LCI) invited public and religious organisations to share their views on the Uniform Civil Code. The commission had also set a 30-day deadline for submissions (Read more about the controversy surrounding UCC here).

Also Read: Battle lines over Uniform Civil Code are getting drawn yet again

While the Government has not assessed how UCC may impact HUFs, Finance Minister Chaudhary shared the details of the number of HUFs that have availed tax benefits in the form of deductions under Chapter VIA of the Income Tax Act during the last five years.

As per the data shared by the Minister, as many as 8,75,948 HUFs availed of tax benefits under Chapter VIA in FY 2022-23. In 2021-22, the number of HUFs who availed this benefit was 8,77,303.

The number of HUFs availing deduction has declined year-on-year since 2020-21. In FY 2019-20, the number of HUFs that availed tax benefits was 9,02,513. It increased to 9,25,307 in FY 2020-21 but declined in the subsequent years as