# Hindu Undivided Family (HUF) under the Income-Tax Act
## Why HUF is a separate taxable entity
The logical chain that makes HUF taxable:
1. Under the Income-Tax Act, HUF is treated as a separate entity for assessment.
2. The definition of "Person" in Sec 2(31) includes HUF.
3. Income tax is levied on "every person".
4. Therefore, income tax is payable by an HUF.
## What constitutes an HUF
An HUF is a family which consists of:
- All males lineally descended from a common ancestor, AND
- Their wives and daughters.
## Members vs Co-parceners — the key distinction
| Aspect | Members | Co-parceners |
|---|---|---|
| Who | All persons in the family | Only members within four degrees including Karta |
| Right in HUF property | No automatic right by birth | Acquire right in HUF property by birth |
| Eligibility | Includes wives, daughters-in-law | Sons and daughters both are co-parceners |
Important exclusion: A wife or daughter-in-law of a co-parcener is NOT eligible for co-parcenery rights. They are members, not co-parceners.
## Coverage extended
Under the Income Tax Act, 1961, the following are also assessed as HUF:
- Jain undivided families
- Sikh undivided families
(Even though strictly speaking they may not be Hindus, the Act extends HUF treatment to them.)