Legal framework for running a proprietary business through an HUF, maintaining books under Section 44AA, and paying remuneration to Karta
Legal framework for running a commercial enterprise through an HUF, business bank accounts, GST registration, salary/remuneration to Karta under Jugalkishore ruling, and audit thresholds.
An HUF can operate proprietary businesses with ancestral capital. Under the Supreme Court ruling in *Jugalkishore Baldeo Sahai (1967)*, bona fide salary paid to Karta for business management is tax-deductible.
Supreme Court Precedent in Jugalkishore (1967)
An HUF can run trading, manufacturing, or service businesses using family capital. See our [HUF ITR Guide](/knowledge/huf-itr).
Salary paid to Karta under a valid family agreement is allowed as a business expense under Section 37(1) if commercially justifiable. Also explore our [HUF Investments Guide](/knowledge/huf-investments).
Clear answers to common client questions
Yes. Under Supreme Court ruling in Jugalkishore Baldeo Sahai, reasonable remuneration for services rendered is deductible.
SKM Laws & Associates advises families, Kartas, and business owners on HUF formation, tax planning, partition, and dispute resolution.
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