If you are part of HUF, your income tax liability can substantially be reduced. The benefits that one gets under HUF umbrella is same as that of an individual, like:
(1) Under s/c 80C – Tax Deductions upto Rs 1.0 lakhs (EPF, life insurance premiums,NSC etc)
(2) Under s/c 80D – Tax Deductions upto Rs 15K (Health Insurance Premium)
(3) Under s/c 80G – Tax Deductions upto 50%-100% (of Donation to charity)
(4) Under s/c 80L – Tax Deductions upto Rs 9K (Interest income from specific band deposits)
(5) Under s/c 54 – Tax Deductions of capital gain resulting from sale of residential property (in case the capital gain is used to buy another property within one year)
In HUF the oldest male head (called as Karta) gets income tax benefits. As an individual suppose you are earning an income, it will be subjected to standard deduction of Rs 1.8 lakhs. If you are entitled for HUF (as karta) you will be able to claim standard deduction of Rs 1.8 lakhs on your income as individual and another standard deduction of Rs 1.8 lakhs from HUF income.
As HUF one can receive gifts from parents in form of money. Monetary gifts even from strangers can be takes upto cap of Rs 50,000. The money received as gifts by HUF shall be invested. The invested money will eligible for tax exemption. Suppose your father wants to give you a gift of Rs 3lakhs. You can ask your father instead to gift the money to HUF. Out of this three lakhs you can invest one lakh in bank deposit. This one lakh can be used to claim savings deduction under section 80C and balance two lakhs will not be taxed.