In India a Family Can Have Its Own Tax Number — Epoche B1
Indian tax law counts a family itself as a taxpayer. A Hindu Undivided Family — the phrase is the law's own — holds its own tax number, files its own return, and pays tax on income that belongs to no single person in it. Inside such a family, people fall into three groups: The karta: the senior member who manages the property and signs for the family. The coparceners: those with a share by birth. Since the change in the succession law in 2005, daughters as well as sons. The other members: those who joined by marriage, entitled to be maintained rather than to a share by birth. Income divides in the same way. A salary is personal and stays personal. Income from ancestral property, or from money given to the family as a family, belongs to the family and is taxed there. Because the family has its own tax-free allowance, the same rupees taxed in two hands are taxed less than in one. That is the mechanism, and it is entirely legal. The price is written into the same rule. Money in the family is nobody's to spend. The karta manages it; he does not own it, and he cannot quietly treat it as his. Unwinding the arrangement means a partition — a formal division, recorded and dated, between relatives who must agree on who takes what. Most families do it late, when the agreement is hardest to reach. So the law recognises something the tax office in most countries never sees: a household that is one purse. A shared purse is easy to keep, cheap to be taxed in, and painful to divide. Families discover the last part a generation after they enjoyed the first. References Government of India (1961). Income-tax Act, 1961, sections 2(31) and 171. Government of India. Parliament of India (2005). Hindu Succession (Amendment) Act, 2005. Government of India.