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These include possible tax-avoidance measures such as using the Hindu Undivided Family (HUF) route to transfer assets within the family.
HUFs enjoy a separate tax status from that of the family members who are part of it.
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Among the reasons the estate duty and the wealth tax were done away with was that their mop up did not justify the government’s efforts to collect them.
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Preeti Khurana, Chief Editor at Cleartax, says, “To avoid inheritance tax, people could tend to form HUFs.
In an HUF, individual family members don’t own the assets of the family; the assets belong to the HUF.
Administrative hassles and litigation meant high costs and low collections.