What is HUF?
The term HUF stands for ‘Hindu Undivided Family’ and comprises of all descendants of a common male ancestor and includes their wives and unmarried daughters. The term of HUF is not defined in income tax law; it is defined under the Hindu Law as a family.
The family continues to exist even after the death of the common ancestor and the next eldest male member becomes the head of the family or the “Karta”. In financial terms, we can call him ‘manager of the family’. Even on the death of all the male members, the HUF continues to exist.
The term ‘Hindu Undivided Family’ (HUF) is defined under Hindu Law. so it can’t be created by an agreement between two parties, nor can it be formed by a group of people who do not constitute the family. Buddhists, Jains, and Sikhs can also form HUF.
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 anscentor and all of his descentors including their dughters and wives,
- Buddhists, Jains, Hindus and sikhs are able to form HUF.
- HUF often has assets which come as will, gift or ancentral 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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- PAN Card
- ID Proof (Driving License/Passport/Voter ID)
- Electricity Bill or any other utility bill for the address proof
How can a HUF be created? Who can be members of a 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..
Does HUF arise from a contract?
No HUF arises only from status..
Does HUF include the wives and daughters of the above-said persons?
Yes. A family consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters.
What is ancestral property?
It is the property, which a man inherits from any of his three immediate male ancestors, i.e., father, grandfather, and great-grandfather.
Can there be HUF with only female members?
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.
Can Karta gift HUF property?
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.
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