01 October 2021
A family comprising of Husband (SK), Wife (N) and a minor son (S) was assessed to tax as a Hindu Undivided Family( SK HUF). The husband expired and the HUF continued with the wife as manager as the son was still minor. The minor had his own income also which was being clubbed with his father and after the death of father the income was clubbed with his mother. The wife(N) got remarried to a divorcee (Y) who is having 2 daughters from his previous marriage. S, the minor son of the deceased SK and N is now not having any parent as the father (SK) expired and mother(N) got remarried. Therefore S is now residing with his Grand Parents. The Grand Parents have their HUF in which S is a coparcener. Now after the remarriage the family comprises of Y, N and two minor daughters as Y HUF. The queries are: What will be the status of SK HUF after N got remarried and S is still minor ? Who will manage the affairs of the SK HUF ? Whether SK HUF would get merged with HUF of Grand Father ? What would be the status of assets of SK HUF during the minority of S and after the S becomes major and after S marries ? Income of Minor S would be clubbed with whose income
01 October 2021
As such no case law available on similar situation. The SK HUF should be dissolved, as S will be only coparcener, even when he attains majority. The assets gets distributed among the existing coparceners & members. The income of minor gets clubbed in the hands of its guardian.
01 October 2021
Section 64 (1A) provides that 1. If the marriage subsists, in the hands of the parent whose total income is greater; or; 2. If the marriage does not subsist, in the hands of the person who maintains the minor child.
3. Income once included in the total income of either of the parents, it shall continue to be included in the hands of some parent in the subsequent year unless AO is satisfied that it is necessary to do so (after giving that parent opportunity of being heard).
So in the instant case the Father of the minor has expired, and the mother got remarried, and the child is living with his grandparents, so I think that the income of the minor would be assessed in his own hands and would not be clubbed with that of either of his grandparents.
Post remarriage of mother of minor the minor is sole member / coparcner entire assets and income of the HUF should become that of the minor. On marriage of the son at a later date, in my opinion what ever was received by him from HUF would become the property of his HUF.
01 October 2021
Totally agreed.... 1. It would be his personal income, need not be clubbed with care-taker. 2. The SA HUF itself get liquidated, so the finally its decision of the child (on attaining Majority) whether to club the assets in his personal capacity or in his HUF.
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