HUF:

A very effective and legal way advised by Chartered accountants to save tax is HUF i.e Hindu Undivided Family.

An HUF is a separate entity that can be created by members of a family wherein the Jains and Sikhs can open HUFs.

A single person cannot create an HUF. Usually the senior-most member of the family is considered the karta, the person who manages the affairs of the HUF.

Once a person gets married, an HUF is automatically created. But to be recorded by tax authorities, it needs to have an income-generating asset, which can only come as a gift from a Once it has such an asset, the HUF needs to be registered in a particular name and other formalities such as opening a bank account and acquiring a Permanent Account Number (PAN) have to be done.