Formation of huf

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Shankar Rao (Querist)
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17 October 2011 My friend & his wife staying along with his father, mother & his brother. his brother is un married and my friend also having one male son. My friend's father does not have any ancistral property
is there any way to form HUF of my friend's father & my friend
kindly let me know

thanks in advance

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
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17 October 2011 Your friends father can form a HUF and all the other members described above can form a part of the HUF.

FORMAT OF HUF CREATION DEEDS

FORMAT-I

DECLARATION

I, ____________________________ son Of ___________________________________ Residing at ____________________________________________ aged ___Adult do hereby declare-

1.That I am Karta of ____________________________________________

1.That I received on behalf of the H U F gift of Rs. ___________ by way of CASH/CHEAUE from my FATHER ________________________________(name of relative of karta of HUF) on dt. _______________ this formed the corpus of the HUF.

1.That the HUF at present is consisting of the followings members-

I) Shri _____________________, Adult, Residing at _________________

II) Smt. _____________________, Adult, Residing at _________________

III) Kumari _________________-Minor, Residing at ___________________

1.That the above statements are true to the best of my knowledge & belief. Declare this on _________________

WITNESS: Signature

1. ————————————–

————————————

2. ————————————– (_____________________)

—————————————————————————————————-

FORMAT- II

[To be executed on Rs. 100 Stamp Paper in Maharashtra]

DECLARATION OF GIFT MADE BY ________________________

TO THE HINDU UNDIVIDED FAMILY OF ___________________

I, _____________________________, residing at _______________________ ____________________________________________________________, do hereby declare and affirm as under:

1. That out of natural love and affection borne by me towards the Hindu Undivided Family of ______________________________, I have made a gift of Rs.______ (Rupees _________________ only) as per the following details:

By Cheque No.________, dated __________, drawn on Bank ____________________, ________________ Branch, in favour of ________________________ HUF.

2. The above Gift has been duly accepted by ________________________, as Karta of his Hindu Undivided Family and has been duly acknowledged hereunder.

3. This Declaration of Gift is made to record the fact that I have made this Gift in favour of the Donee as above, who now has the absolute right, title and interest in the gifted amount.

Date: ___________, 200__ ___________________

(Signature of the Donor)

ACKNOWLEDGEMENT OF GIFT

I, ________________________, hereby acknowledge having received the above gift made to my Hindu Undivided Family by _________________________.

Date: ___________, 200__ ___________________

(Signature of the Donee
as Karta of his HUF)

Then attach this copy along with your address proof then apply in 49A. Then you will be allotted PAN by the Income Tax department.

For creating the HUF one need to get married, as soon as one take seven circles(SAATH PHERE) the HUF created. There is no need to have child or children for creating the HUF

The KARTA which is the Hindi word means ‘DOER’ has the immense power of all the affairs of the family more than any of the coparcener. Usually the KARTA is the father of the family who has the right to do all the things for the family.

HOW THE HUF CREATED AND CREATE CAPITAL

These are the steps to create capital of a HUF.

1- First one should open a bank account with the name of Hindu undivided family like RAMESH HUF with a stamp, ID Proof and the proof of the members of the family of HUF.

2- Next is to apply for PAN (Permanent Account Number) of the income tax.

3- Now transfer money by gifts etc to HUF capital keeping in view the clubbing provisions and tax on gifts under Income tax act, Remember there is no Tax on gifts in kind though they may attract clubbing provisions in some cases.

4- Stranger can gift HUF but nor more than 50000 rupees as per section 56 of income tax act.

5- A Father can gift to his son’s newly created HUF and not for his son but to his family according to 64(2) and 56(2) of the income tax act.

6- HUF funds and the affairs of the HUF are completely differs from one’s own affairs. One can do his/her business/job freely while having the member of HUF. But HUF income and individual income are different and to be taxed differently.