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Hindu Undivided Family

Planning to form an HUF? Contact us and do let us know how we may help you.

    hindu undivided family

    Hindu Undivided Family

    Under Hindu Law, an HUF is a family which consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. An HUF cannot be created under a contract, it is created automatically in a Hindu Family. Buddhists, Jains and Sikhs can also form HUFs.

    An HUF is treated as a separate assessable entity and possesses a distinct PAN number. It has its separate bank account and enters into contract on its own. Any senior male/ female member can be the KARTA of an HUF. The rest of the family members are either co-parceners or simply members. An HUF continues to exist till the coparceners demand a partition. It is not necessary for the KARTA to be a resident Indian. The residential status of an HUF is determined by the location from which the HUF ismanaged or operated.

    Advantages of HUF:

    • Tax Saving by diversion of income
    • Recognition all over India except Kerala

    Disadvantages of HUF:

    • Equal rights to every member irrespective of age or contribution
    • Partition of HUF is a tough job
    • Rise of petty isues among the family members for bigger share in ancentral property
    • Legal issues while dissolutions

    Steps for Registration of HUF:

    • Create an HUF deed
    • Apply for a PAN Card of HUF
    • Open a Current bank account in the name of HUF