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HUF stands for Hindu Undivided family & governed by Hindu law board. The expression “Hindu Undivided Family” has not defined under the Income Tax Act or in any other statute.
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PAN
HUF stands for Hindu Undivided family & governed by Hindu law board. The expression “Hindu Undivided Family” has not defined under the Income Tax Act or in any other statute. HUF could be formed by a married couple or by members of a joint family. To form a HUF minimum two members are required & at least one among whom should be a male member of the family. Senior most male member of the family would become ‘Karta’.
Although it is governed by the Hindu law board, it can be formed by Jains, Sikhs and Buddhists as well. It is a body consisting of persons lineally descended from a common ancestor and includes their wives and unmarried daughters, who are living together, joint in food, estate and, worship (not now necessary). The daughter, on her marriage, ceases to be a member of her father’s HUF and becomes a member of her husband’s HUF. However, after 1-9-2005, daughter married or unmarried, is a coparcener like a son.
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Note Down The Documents Required For HUF Registration
PAN Card of Karta
Aadhaar Card of Directors/Driving License/Passport
List of coparceners
Fill HUF Registration Form
Conditions to be fulfilled to create an HUF:
- HUF should only be formed by a family.
- HUF is automatically created for newly added member of the family at the time of their marriage.
- HUF in general consists of a common ancestor and all of his descanters including their daughters and wives,
- Buddhists, Jains, Hindus and Sikhs are able to form HUF.
- HUF often has assets which come as will, gift or ancestral property,
- Once the HUF is created, the bank account should be created in the name of the HUF. A PAN number will be generated in the name of HUF.
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Key Benefits of HUF
- Every member of the family can deposit their income in the common corpus
- Single person’s authority while participation from the entire family.
- Gifts collected up to a worth of Rs 50,000 will be tax free. A father who owns a HUF account can gift a property or money of higher worth to a son who owns a smaller HUF account, but he should specify that the gift is for the son’s HUF and not to him as an individual. Under section 64(2) and 56(2) tax benefits can be enjoyed in such instance.
- Corpus can be used for investment in tax-free money instruments.
- Corpus can be divided only on agreement of every coparcener of the family.
- The Income Tax Act recognizes the HUF as an independent assessable or taxable entity. Hence, HUFs enjoy all deductions and exemptions under the IT Act independent of the income and tax liabilities of its members. A separate Income Tax Return is filed under Income Tax Act.
- Tax Saving- For example- an ancestral property that yields rental income. Under normal circumstances, the rent will be attached to a person’s income and will be taxed according to that individual’s tax slab. However, if it is transferred to an HUF, the income will be that of the HUF’s and will be taxed separately.
FAQs On HUF
Birth of a son in a Hindu joint family automatically makes him a member of the HUF. In view of this, all male members and unmarried daughters automatically become members of the HUF. In addition to that, if a child is adopted, then he also becomes a member of the HUF. Moreover, upon marriage, a wife becomes a member of her husband’s joint family.
No HUF arises only from status.
Yes. A family consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters.
It is the property, which a man inherits from any of his three immediate male ancestors, i.e., father, grandfather, and great-grandfather.
Yes. As so long as the property which was originally of the joint Hindu family remains in the hands of the widows of the member of the family and is not divided, HUF can continue with female members.
Gift by Karta of HUF, a movable property or an immovable property within reasonable limits in favor of his daughter is permissible on the occasion of her marriage.
Allmembers;
A son in the womb of his mother at the time of partition;
Mother;
Wife.
No. A single person cannot constitute HUF. There must be minimum two members to constitute a HUF.
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