A Hindu Undivided Family (HUF) is a separate legal entity recognized under Indian tax laws. It consists of members of a Hindu family, including lineal descendants. An HUF can own property, operate a business, and file separate income tax returns. It provides tax planning benefits, as income earned by the HUF is taxed separately from individual members. An HUF is formed automatically in a Hindu family but requires formal documentation and PAN for financial transactions. It is commonly used for family businesses and wealth management.