Full Form of HUF:
Hindu Undivided Family
HUF Full Form is Hindu Undivided Family. HUF refers to the jointly structured family where all members of a family (devoted to Hindu religion) live together. The members of such family are linked to each other under a relationship tree or diagram. This type of families can be seen mostly in India.
An HUF is defined and governed by the Hindu law. The law states that the members of such family should linearly and periodically descend from their common ancestors. The law does not govern the families devoted to Jain or Sikh religion. Yet these families are considered as Hindu Undivided Families. Coparcener members can claim their rights in the property and assets of the family, but non-coparcener members cannot claim any rights in the partition of properties. These families typically have a head member who is usually the senior most person in the family.
HUFs usually created to save taxes as the Income Tax Act of 1961 permits them so. As there are multiple members in an HUF and there is no individual who earns the whole income of the family, a separate PAN ( Permanent Account Number ) card is issued in favor of the family. As the individual income amounts of the family members stack up and flows into a potent common pool, the members collectively enjoy the progressive benefits of income tax redemption.