Hindu Undivided Family
Hindu undivided family is shortly called as HUF. One can save the taxes by creating a family unit to form HUF. And also pool in assets to form HUF. Not only Hindus, Buddhists, Jains also come together to form the HUF. There should be group of persons and they should never be divided. It is taxed separately from its members. The taxation for the HUF is separate from its members, therefore the exemptions allowed under the tax laws can have the claim by it separately. HUF can take the insurance policies on the life of their members.
- HUF should contain minimum two members and they must be related.
- Members by their birth make the members to be eligible in the HUF. Thus very interestingly minors can also be the members of it.
- HUF will be headed by the Karta who has the whole control over the family.
- HUF will be recognized as separate tax entity. So money can be borrowed and lent.
- HUF has the perpetual succession.
- It contains the HUF deed.
- PAN card
- Electricity bill/ utility bill
- Aadhaar card
Procedure for registration
Step 1: HUF deed
Create eh HUF deed undivided family deed in a written formal document on a stamp paper stating the name of Karta.
Step 2: Apply for HUF pan card
As HUF is treated as separate entity it has apply for separate PAN Card. The application for the HUF PAN card has to be made in Form 49A.
Step 3: Open HUF bank account
HUF account should be opened in any bank and it should possess bank passbook. All the documents of the HUF should be stamped.
Yes. It is possible to have HUF with female members. The property which was origin of the joint Hindu family remains the hands of the widows.
Kerala is the state in which the HUF is not recognised. This is done by Kerala Joint Family System Act 1975 with effect from 1.121976.
No. Section 6 of Income tax Act 1961, says that HUF can be non-resident also.
The female members who are born in the family can become Karta of the HUF. The other family members who came into the family by virtue of marriage cannot assume the role of Karta.
If the monetary gift received from abroad exceeds Rs.50, 000, then it is liable to tax.
Yes. A married daughter can become a part of the HUF.