1. Create an HUF
Many salaried taxpayers, who are Hindus (including Jains and Sikhs), do not have a separate file for the HUF.
However, it is possible even without any ancestral property for a Hindu to have a separate tax status of Hindu Undivided Family and thus get a separate tax exemption of Rs 1500,000 (in FY 2008-09) on income earned by the Hindu Undivided Family.
Besides, a separate deduction of up to Rs 100,000 from taxable income would be available in respect of investments made through the HUF.
For this purpose, what one needs is gift from friends and relatives (other than members of the HUF), supplemented by interest-free loans, or loans at low rates of interest, from relatives and friends.
There can even be a Hindu Undivided Family comprising of only husband and wife.
Image: Cricketer V V S Laxman (L) goes out with his son and wife at the team's hotel in Sydney | Photograph: Prakash Singh/AFP/Getty Images
Also read: Now, save up to Rs 50,000 in taxes
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