HUF – Hindu Undivided Family
HUF
coming into Existence.
Ø HUF is
recognized as a person- Sec 2(31) of the
Income Tax Act. As this HUF enjoys the benefits, like basic exemption,
80-C deduction, Sec.54, 54EC, 54F exemption, it is always advantageous to claim
a separate HUF status to avail these benefits. But “HUF ” word has not been
defined in any statute.
Ø HUF is a creation of Hindu Law. Thus it
is formed by status and not by any contract or enactment.
Ø A husband and wife can constitute a HUF,
if there was a common inherited property.
Creation
of HUF
} It can be by way of
1) Partition
2) Gift
3) Will
4) By Blending
5) By Reunion
HUF
Partition
Ø The wife of a Karta or a non-coparcener
member cannot claim partition. But at the time of partition Karta’s wife can
claim a share equal to that of her son.
Ø If all the members agree there can be
unequal partition.
Ø The partition of a HUF can be by any one of
the modes.
1) Oral
2) By a suit
3) By an agreement or Deed
4) By an Arbitration Award
Ø Income Tax Act does not recognize a
partial partition after 31.12.78. Only
existing Assessees as per Income Tax Act, need to claim for recognition of a
partition U/s.171. Even after total partition, all members are liable for taxes
of erstwhile HUF, under IT Act, if it was earlier assessed as such.
Ø Partition must be total both in respect
of persons and the properties. Where ever it is possible, the physical division
of property, must be by metes and bounds.
Ø A HUF Business after total partition can
be converted into a Valid Partnership Firm.
Karta’s Duties and
Responsibilities
Ø Under the Hindu law prevalent in India,
the manager of a Hindu undivided family or a Hindu joint family is called the
‘Karta.’
Ø As an accepted general rule, the right
to manager ship of a Hindu Undivided Family under the Hindu law is conferred on
the father as the head of a joint Hindu family.
Ø Where the father of the family is dead,
the right to manager ship of the Hindu Undivided Family simply devolves up on
the senior-most adult co-parcener of the Hindu joint family.
Ø The Karta has extensive powers in
respect of the day-to-day management of the joint Hindu family.
Ø The Karta is always expected to utilize
the income of the joint family for the purpose of the family, viz., for the
maintenance, education, marriage, shardh and other religious ceremonies of the
coparceners and members of the joint family.
Death
of a coparcener
} On the death of any coparcener, the
other coparceners in the family may take by survivorship that in which they had
during the deceased’s lifetime a common interest and a common possession.
Daughter
share in HUF
} On 9.9.2005, the Hindu succession Act, 1956 Sec.6 was amended to provide that
o
The daughter of a coparcener shall by birth become a coparcener in her
own right in the same manner as the son and she has a equal share that of a son.
o
She too could enforce the partition of the family property to claim her
Individual Share.
o
She continues to be the coparcener in her father’s HUF even after she
gets married and forms another HUF with her husband.
Gifting to and from HUF:
Ø
Gifts to HUF, in aggregate up to Rs.50,000/- Per annum are exempt
U/sec.56(2)(x) subject to Sec.64(2). Gifts in kind are also covered by Sec.56.
E.g : Jewellery, Shares, Bonds, all other movable and immovable properties.
Ø
HUF giving Gifts to an Individual i.e., member of such HUF is not
taxable under Sec.56(2)(x).
Assessment of Hindu Undivided
Family
} HUF is a separate and a distinct tax
entity. The income of a HUF can be assessed in the hands of the HUF alone and
not in the hands of any of its members, unless specifically provided by law.
} However, any sum received by an
individual as a member of a HUF, where such sum has been paid out of the family
or income of the impartible estate belonging to the family shall be exempt in
the hands of the member of the HUF as per Section 10(2).
Hindu Succession Act –
Inheritance
} The Act
applies only in case where a Hindu male or female dies without making a
will and leaves behind property.
} The Act applies only in case of
intestate succession, i.e., to the following:
1) Any person who is a Hindu, Jain, Sikh or
Buddhist by religion.
2) Any person who is not a Muslim,
Christian, Parsi or a Jew.
3) Any person who becomes a Hindu Jain,
Sikh or Buddhist by conversion or reconversion.
4) Legitimate / illegitimate child whose one or both parents is a Hindu, Jain,
Sikh or Buddhist by religion.
} However, in case only one parent is a Hindu, Jain,
Sikh or Buddhist by religion, then the child must be brought up by such parent
as a member of his community, family, etc.
} Step son is not a “SON”.
Income Tax Rate of HUF
} Tax rate is same as Individual and tax
is calculated as per slab. Thus, HUF can also avail income exemption upto Rs.
2,50,000 like individual as it has a separate identity.
Disadvantages of HUF
Whenever an asset is transferred to HUF
it remains with it. Only when the coparceners will demand a partition of HUF,
the property can be shared by the coparceners. HUF property cannot be mentioned
in the WILL.
Format of NOC by Female
Coparceners to waive off their right/share in HUF property
DECLARATION/NOC BY CO
PARCENERS OF HUF
To
Dear Sir,
1) I/we ……………………………………………( Name of Co-Parceners ) hereby declare
that I/we are the Co-Parcener of the HUF ……………….. … (Name of HUF)
2) We all the below mentioned coparceners declare that we
bequeathed our share in the Hindu undivided family property
including our share in the business and the bequest was in favour of ….,, and
all the legatees were entitled to share in the bequest equally.
3) We further state that we released our right, title and
interest in the business in favour of the other legatees, namely,…..
4) We who was described as a party of the second part was
releasing all our right, title and interest as an heir of her FATHER in the
joint family firm and we had no claim or demand whatsoever in the goodwill,
trade name, assets, liabilities, outstandings and stocks of the said firm and
the parties of the first part, that is,………, had become absolutely entitled
thereto
5) We further state that the children of this person will also
not be able to stake claim over the property in future.
Yours faithfully
(coparcener of the HUF)
HUF Stamp to be affixed
List of Co-parceners
|
Name |
DOB |
Relationship with
the Karta |
Signature |
To be signed by all members including female members
AFFIDAVIT
FORMAT FOR GETTING PAN CARD (to be printed in Stamp Paper of Rs.20 alongwith Notary
from an Advocate)
AFFIDAVIT FOR PAN APPLICATION
I, NAME OF THE KARTA aged about
..., years, Hindu, Adult,
Indian, Inhabitant presently residing at
ADDRESS, Do hereby state,
declare and confirm under;
That NAME HUF is a Hindu Undivided Family consisting
of following co-persons;
S.NO NAME RELATIONSHIP DATE OF BIRTH
1 SELF (KARTA)
2 WIFE
3 SON/DAUGHTER
That the Date of Incorporation of
HUF is DATE OF FORMATION
Solemnly affirmed at PLACE
On this DATE
HUF DEED FORMAT
DECLARATION
I, ……………………………………. son of ………………………………….
residing at ………………………………………. aged .. Adult do hereby declare
-
1. That I am
Karta of ……………………………… (HUF).
2. That I received
on behalf of the
H U
F gift of Rs. ………../- by way of
cash from my ………………………….. on dt. ………….. this formed the corpus
of the HUF.
3.
That the HUF at
present is
consisting of the
following members-
I)
…………….., Adult residing at …………………….
4. That the above
statements are true to the best
of my knowledge & belief. Declared this on Date.
WITNESS
1.
————————————– 1.
2. ————————————– 2.
Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.
HINDU UNDIVIDED FAMILY PARTITION DEED
----------------------------------------------------------------
THE DEED OF PARTIES ON of Sri ………………………… S/o ……………. Hindu Undivided Family executed at …………………. on this ………………. by and between the members of the family
1. Sri …………………….. HUF by karta of HUF ……………….
and his Wife
Smt………………………. and Sons Sri. ……………………. and
Sri ……………...
2. Sri ……………… HUF by karta of HUF …………… and his
wife Smt………………. and daughter Smt. ………...
3. Sri ………….
HUF by karta of HUF …………….and
his wife Smt……………………...
------------------------------------------------------------------
NOW
THIS INDENTURE WITNESS AS FOLLOWS:
Whereas Sri ………………. HUF inherited
the Hindu Undivided Family properties from their ancestral HUF ……………. HUF the Families traditionally agriculturalist
and money lender since several years, the family was carrying on agricultural operation
and money lending activities for past several years. Whereas differences have arisen between the
members of the family and thereby members of the family agreed to fully
partition the properties belonging to the said Hindu Undivided Family. As all
the members of Sri ………………… HUF are married
and separated because of disputes between their family members and hence they
decided to partition their HUF into their three HUF’s. The terms and conditions
governing the partition as agreed between the members of the family now put into
writing. Now this indenture witnesses as follows:-
1. Schedule i properties should go to Sri ………………… HUF consisting of himself and his wife Smt……………...
2. Schedule ii properties should go to Sri ……………. HUF consisting of himself
and his wife Smt………………….
3. Schedule iii Properties
should go to Sri ……………. HUF consisting
of himself and his wife Smt………………….
All the Members of the family agreed and are in best of health and soundness of mind and that except as agreed herein above all the members of the family accept the above said partition as correct and acknowledge having received the possession of the above said mentioned properties as per schedules i, ii and iii respectively by the members of the family.
IN WITNESS WHEREOF THE PARTIES HERE TO HAVE
SET THEIR RESPECTIVE HANDS THIS DAY AND YEAR FIRST ABOVE MENTIONED:
WITNESS : SIGNATURE OF THE MEMBERS
~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~
OF THE HINDUE UNDIVIDED FAMILY
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. 1.
2. 2.
3. 3.
|
DESCRIPTION
OF PROPERTIES PARTITIONED |
SCHEDULE
i AMOUNT/VALUE/
ESTIMATE IN RS |
SCHEDULE
ii AMOUNT/VALUE/
ESTIMATE IN RS |
SCHEDULE
iii AMOUNT/VALUE/
ESTIMATE IN RS |
|
1.
GOLD JEWELLERY |
|
|
|
|
2.
SILVER HOUSEHOLD UTENSILS |
|
|
|
|
3.
SUNDRY DEBTORS |
|
|
|
|
4.
DIAMOND |
|
|
|
|
5.
CASH |
|
|
|
Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.
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