Process of forming HUF
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You can get expert advice on formation of HUF
Documents submission & verification
Once you submit the documents required, our experts will do the paperwork.
Drafting & executing HUF Deed
After the verification of documents, HUF deed will be drafted & its further execution will take place.
Obtain PAN & TAN
After the HUF deed has been executed, PAN & TAN will have to be obtained.
An HUF is a family which consists of all male lineal descendants from a common ancestor, and also the spouses and unmarried daughters of the descendants. While the male members are called coparceners, the females are referred to as members. The senior-most male member is called the karta, and a typical HUF consists of a karta, his sons, grandsons, and great-grandsons (all of whom are coparceners), and their wives and unmarried daughters (all of whom are members). Even Jain, Buddhist and Sikh families can have HUFs. An HUF is recognized as a separate assessable entity under the Income Tax Act, 1961.
An HUF automatically comes into existence as soon as a child is born to a Hindu couple.So a new HUF can come into existence after birth of a child in the family whether it is a boy or a girl. However, a married Hindu couple itself can constitute as an HUF if any ancestral property is received by it on partition. Once the HUF is created, a bank account should be created in the name of the HUF. After that, a PAN number will also be generated in the name of HUF.It is always advisable to have a written agreement as the Banks and Income Tax Dept ask for the HUF Deed.
Advantages of forming HUF
Tax Free Gift
If a monetary gift up to INR 50000 is received in cash, cheque, draft, etc by an individual/ HUF, it is free from income tax. Also, a gift by Karta to his daughter on her marriage is exempted from taxation.
Seperate Legal entity
One of the important advantages of HUF is that it is considered as a separate legal entity. Just like an entity, HUF has to obtain separate PAN Card & open bank account in the name of HUF.
Each member of HUF has an equal right to the property owned by an HUF. New members that get added to the family by way of birth or marriage also have an equal share in the property.
By creating an HUF, you get an additional PAN Card which would be legally acceptable as well as to avail the tax benefits.
Documents required for forming HUF
(Driving License/Passport/Voter ID)
(Electricity bill or any other utility bill)
Frequently asked questions
How can HUF be formed?
An HUF automatically comes into existence as soon as a child is born to a Hindu couple. So a new HUF can come into existence after birth of a child in the family whether it is a boy or a girl. However, a married Hindu couple itself can constitute as an HUF if any ancestral property is received by it on partition.
Who can be members of HUF?
Birth of a child whether a boy or a girl in a Hindu joint family automatically makes him/her a member of the HUF. A typical HUF consists of senior-most male member of the family i.e. karta, his sons, grandsons, and great-grandsons (all of whom are coparceners), and their wives and unmarried daughters (all of whom are members).
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 long as the property which was originally of the joint Hindu family remains in the hands of the widows of the members 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.
Whether a single person can constitute HUF?
No. A single person cannot constitute HUF. There has to be minimum two members to constitute a HUF.