HUF and AOP
HUF (Hindu Undivided Family) and AOP (Association of Persons) are different legal entities with distinct characteristics and purposes.
Here’s a brief explanation of each:
1. HUF (Hindu Undivided Family):
HUF is a legal entity recognized under Hindu law in India. It is forme by a group of family members who are lineal descendants of a common ancestor and share a joint family property.
HUF has its own PAN (Permanent Account Number) and treated as a separate tax entity for income tax purposes. It offers various tax benefits and allows for efficient management of family assets and succession planning.
2. AOP (Association of Persons):
AOP is a legal entity recognize under the Income Tax Act in India. It refers to an association of two or more individuals or entities who come together to carry out a business or professional activity with a common goal or purpose.
AOP treated as a separate tax entity for income tax purposes and has its own PAN. It allows for the pooling of resources, joint decision-making, and tax planning for the members involved.
The choice between HUF and AOP depends on the specific circumstances, objectives, and nature of the activities involved. HUF typically formed by a family to manage family assets and avail of tax benefits.
AOP, on the other hand, is formed by individuals or entities to engage in a business or professional activity together. Consulting with a qualified legal or tax advisor can help determine the most suitable entity based on your specific requirements and objectives.
To visit: https://www.mca.gov.in/
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