Hindu Undivided Family
The Hindu Undivided Family, or HUF, offers tax-saving opportunities by uniting as a family unit. Assets can be pooled to create an HUF, not just among Hindus but also Buddhists and Jains. It requires a united group that remains undivided. HUF is taxed independently from its members, allowing it to claim tax law exemptions separately. Additionally, HUFs can secure life insurance policies for their members.
- The HUF must have at least two related members, with birth making them eligible to join. Surprisingly, even minors can be HUF members.
- The Karta leads the HUF and holds complete control.
- As a separate tax entity, HUF can borrow and lend money.
- It enjoys perpetual succession and operates through an HUF deed.
- PAN card
- Electricity bill/ utility bill
- Aadhaar card
Procedure for registration
Step 1: HUF deed
Draft an HUF Deed on a stamp paper, stating the Karta's name as part of the formal document.
Step 2: Apply for HUF pan card
As the HUF is a separate entity, it needs its own PAN Card. Apply using Form 49A.
Step 3: Open HUF bank account
Open an HUF account in any bank and ensure the bank passbook includes stamped HUF documents.
Absolutely! HUF can include female members. In cases where widows are involved, the property originally belonging to the joint Hindu family remains in their possession.
In Kerala, the HUF isn't acknowledged due to the Kerala Joint Family System Act 1975, effective from 1st November 1976.
No, according to Section 6 of the Income Tax Act 1961, an HUF can also be a non-resident.
Female members born into the family can become the Karta of an HUF. However, other family members who join through marriage cannot take on the role of Karta.
If the monetary gift received from overseas crosses Rs. 50,000, it becomes taxable.
Yes. Married daughters are eligible to be a part of the HUF.