Published 26 October 2026
An HUF’s return looks like an individual’s, and that is where the mistakes begin. The simplest form, ITR-1, is not open to it. The section 87A rebate that makes the new regime nil-tax for many individuals up to Rs 12 lakh is not available to it at all. The return must be verified by the karta, and by no one else unless the karta is abroad or incapacitated. The regime choice works as it does for an individual, but a family with business income that opts out in one year is bound in later years. This guide covers the form, the due date, the verification and the regime for an HUF, under both Acts.
Which Act governs which year
- Assessment year 2026-27 (financial year 2025-26). The return is filed under section 139 of the Income-tax Act, 1961, in the ITR forms notified for AY 2026-27 under rule 12 of the Income-tax Rules, 1962. It is verified under section 140(b). The new regime is section 115BAC.
- Tax year 2026-27 onwards. The return is filed under section 263 of the Income-tax Act, 2025 and verified under section 265. The new regime is section 202, and the option to leave it is exercised under rule 136 of the Income-tax Rules, 2026. The first returns under the 2025 Act fall due in 2027.
- Section 536(2)(f) deems an option “exercised, by an assessee under any provision of the repealed Income-tax Act and in force immediately before the commencement of this Act” to have been exercised under the corresponding provision of the 2025 Act.
Residence
An HUF’s residence turns on where its affairs are controlled, not on where its members live. It is resident in India unless “the control and management of its affairs is situated wholly outside India” during the year (section 6(2) of the 1961 Act; section 6(9) of the 2025 Act). A resident HUF is not ordinarily resident if its manager, the karta, has been non-resident in nine of the ten preceding years, or in India for 729 days or less in the seven preceding years (section 6(6)(b); section 6(13)(a)).
The form
For AY 2026-27 the choice is between three forms. The e-filing portal’s “Return / Forms applicable to me” page describes ITR-1 (Sahaj) as “Applicable only for Individual”.
| Form | Which HUF | Source |
|---|---|---|
| ITR-2 | An HUF “not having income from profits and gains of business or profession” | Income-tax (Third Amendment) Rules, 2026, G.S.R. 227(E), 30 March 2026 (Notification No. 46/2026) |
| ITR-3 | An HUF “having income from profits and gains of business or profession” | Income-tax (Fourth Amendment) Rules, 2026, G.S.R. 228(E), 30 March 2026 (Notification No. 47/2026) |
| ITR-4 (Sugam) | A resident HUF (other than not ordinarily resident) whose business income is computed on a presumptive basis under section 44AD, 44ADA or 44AE, within the form’s other limits | The e-filing portal’s description of the form |
Both ITR-2 and ITR-3 open with a status box (“Individual” or “HUF”) and ask for the “Date of Birth/Formation”. For an HUF, that is the date of formation. The HUF’s PAN goes in the PAN field, not the karta’s. The site’s walkthroughs show the rest of each form field by field. For example, see ITR-2 with listed equity capital gains and ITR-4 for a small trader under section 44AD. The same fields apply to an HUF, with HUF in the status box.
The due date
The due date is fixed by Explanation 2 to section 139(1). An HUF with no business income, or with business income whose accounts are not required to be audited, does not fall in the audit rows of the table. The dates, and the AY 2026-27 extension for audit cases by CBDT Circular No. 07/2026, are set out in Belated and Revised Returns. The date matters more than the fee: the old regime is lost in a belated return, as explained below.
The new regime is the default for an HUF
Section 115BAC(1A) of the 1961 Act applies the new rates to “a person, being an individual or Hindu undivided family”, among others, unless the person opts out under section 115BAC(6). Section 202(1)(b) of the 2025 Act names the HUF in the same way. For AY 2026-27 and tax year 2026-27 the slabs are identical:
| Total income | Rate |
|---|---|
| Up to Rs 4,00,000 | Nil |
| Rs 4,00,001 to Rs 8,00,000 | 5 per cent |
| Rs 8,00,001 to Rs 12,00,000 | 10 per cent |
| Rs 12,00,001 to Rs 16,00,000 | 15 per cent |
| Rs 16,00,001 to Rs 20,00,000 | 20 per cent |
| Rs 20,00,001 to Rs 24,00,000 | 25 per cent |
| Above Rs 24,00,000 | 30 per cent |
Under the old regime, an HUF is taxed at Paragraph A of Part I of the First Schedule to the Finance Act, 2026 for AY 2026-27: nil up to Rs 2,50,000, 5 per cent to Rs 5,00,000, 20 per cent to Rs 10,00,000 and 30 per cent above. The higher exemption limits for residents aged 60 and 80 are for individuals only. They are items (II) and (III) of Paragraph A, and an HUF falls in item (I).
No rebate. Section 87A gives its rebate to “an assessee, being an individual resident in India”. Section 156(1) of the 2025 Act uses the same words. An HUF is not an individual. Its tax is computed at the slab rates with no rebate, however small its income. The guide for employees, Old or New Regime, explains the rebate. None of it applies here.
A worked example for AY 2026-27, for an HUF with total income of Rs 7,00,000 from rent and interest and no deductions:
| New regime | Old regime | |
|---|---|---|
| Tax on the first Rs 2,50,000 | nil | nil |
| Rs 2,50,001 to Rs 4,00,000 | nil | Rs 7,500 |
| Rs 4,00,001 to Rs 5,00,000 | Rs 5,000 | Rs 5,000 |
| Rs 5,00,001 to Rs 7,00,000 | Rs 10,000 | Rs 40,000 |
| Tax before cess | Rs 15,000 | Rs 52,500 |
An individual with the same income under the new regime would pay nothing, because of the rebate. Deductions the old regime allows an HUF, such as section 80C for life insurance on the life of “any member” (section 80C(4)(a)(ii); section 123 of the 2025 Act) and section 80D for the health of any member (section 80D(3); section 126(5)), can narrow the gap. Whether they close it depends on the family’s own figures. See Section 80C: What Qualifies and What to Keep and Health Insurance and Medical Costs: Section 80D.
Leaving the new regime
An HUF with no business income opts out in the return itself, every year it wishes to. Section 115BAC(6)(ii) requires the option to be exercised “along with the return of income to be furnished under sub-section (1) of section 139”. ITR-2 for AY 2026-27 asks: “Do you wish to exercise the option u/s 115BAC(6) of Opting out of new tax regime? (default is “No”)”. Its note adds that “option should be exercised along with the return of income filed u/s 139(1)”. A belated return under section 139(4) is not a return under section 139(1), so a late-filing HUF is taxed under the new regime.
An HUF with business income must opt out “on or before the due date specified under sub-section (1) of section 139” (section 115BAC(6)(i)). Under the 1961 Act this is done in Form 10-IEA. The ITR-3 notified for AY 2026-27 says the old regime “can be chosen by opting out of new regime u/s. 115BAC(6) by filing form 10IEA, which should be exercised on or before the due date for furnishing the return of income u/s 139(1)”. It asks for the acknowledgement number of any Form 10-IEA filed for an earlier year, and of any second Form 10-IEA used to re-enter the new regime. Under the proviso, the option once exercised applies to later years and “can be withdrawn only once”. After that, the HUF can never opt out again unless it ceases to have business income.
Under the 2025 Act there is no Form 10-IEA. Rule 136 of the 2026 Rules says the option under section 202(4), for an “Individual or Hindu undivided family” among others (Table, Sl. No. 4), “shall be in the return of income to be furnished under section 263(1)”. Section 202(4)(a) keeps the business-income conditions: the option is exercised by the due date, applies to later years, may be withdrawn only once, and after withdrawal cannot be exercised again unless business income ceases. An HUF that opted out by Form 10-IEA before 1 April 2026 carries that option into the 2025 Act through section 536(2)(f). The guide for employees covers the same rules for individuals in more detail.
Who verifies the return
Section 140(b) of the 1961 Act requires an HUF’s return to be verified “by the karta, and, where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family”. Section 265 of the 2025 Act, Table Sl. No. 2, says the same: “(i) By the karta; (ii) where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family”.
Two points follow from the words:
- No power of attorney. For an individual, the 1961 Act lets a person holding a power of attorney verify where the individual is absent or otherwise unable to. Nothing in section 140(b) or Sl. No. 2 of section 265 allows this for an HUF. The substitute is an adult member, and only in the two situations named.
- The verification states the capacity. The verification in ITR-2 for AY 2026-27 reads “I further declare that I am making return in my capacity as ___________ and I am also competent to make this return and verify it.” For an HUF, the capacity stated is that of karta, or of the adult member verifying in the karta’s place.
The modes (digital signature, electronic verification code, or a signed ITR-V) and the 30-day limit are in E-Verifying a Return.
What the members receive
Money paid by the HUF to a member out of the family’s income is not taxed again in the member’s hands. Section 10(2) of the 1961 Act exempts “any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family”. Under the 2025 Act, Schedule III (applied by section 11), Table Sl. No. 1, carries the same exemption, on condition that the sum is paid out of the family’s income and is not covered by section 99(3) and (4). Both are subject to the clubbing rule for property a member has thrown into the family, discussed in Gifts to an HUF and the Clubbing Rules.
Late fee, interest and corrections
The section 234F fee and section 234A interest for a late return, and the 2025 Act counterparts in section 428(a) and section 423, apply to an HUF as to anyone else. So do the revised return under section 139(5) and the updated return. See the belated and revised returns guide linked above, and The Updated Return (ITR-U). A revised return cannot recover the old regime for an HUF without business income if the original return was belated. Nor can Form 10-IEA be filed after the due date to change the regime of an HUF with business income.
What to have ready
- The HUF’s PAN and date of formation, and the karta’s details for verification.
- Whether the karta was in India for the year and, if not, which adult member verifies.
- Income by head, with the AIS and Form 26AS for the HUF’s PAN (see Reconciling AIS, TIS and Form 26AS).
- For business income: any Form 10-IEA acknowledgements from earlier years, and whether the option has already been withdrawn once.
- A computation under both regimes, without the section 87A rebate.
- Proof of any old-regime deductions claimed for members.
In order
- The HUF settles its residence for the year from where its affairs were controlled.
- It picks the form: ITR-2 without business income, ITR-3 with it, or ITR-4 if it is resident with only presumptive business income within that form’s limits.
- It computes tax under both regimes, with no rebate under either.
- Without business income, it opts out, if at all, in a return filed by the due date. With business income, it files Form 10-IEA by the due date for AY 2026-27, and from tax year 2026-27 exercises the option in the return.
- The karta verifies the return, or another adult member does if the karta is absent from India or incapacitated, within 30 days of upload.
The next guide, Gifts to an HUF and the Clubbing Rules, explains which gifts the HUF can receive tax-free, and whose income their earnings are.