Formation of HUF..how done?

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ankit (Querist)
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24 July 2011 My grandparents died this year..and they have left us some cash and some property..to thir 3 sons...I am looking forward to take the interest income on the bank balance and rent from their property as income of HUF..is it possible to do so?

if its not possible how can make it income of HUF???

CA. DINESH KUMAR

CA. DINESH KUMAR (Expert)
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25 July 2011 Yes, you can create H.U.F.

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)

II)

III)

Shri _____________________, Adult, Residing at _________________

Smt. _____________________, Adult, Residing at _________________

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
as Karta of his HUF)

the

Donee

ankit

ankit (Querist)
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25 July 2011 thanks mr dinesh..but i have few more doubts here...pls help..!

q.1) as per my understnading this deed does not reuire registeration??

q.2) as both my grandparents have died ..so my father(i.e. my grandfathers son) can bring in all the property inherted to HUF...and it will to deem to be gift to huf...in deed.

q.3)How can i increase the corpus of HUF???
coz as per my understanding any gift made to huf without or inadequate consideration attracts 64(2)...and income will get included in the hands of transferor ...?

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CA. DINESH KUMAR

CA. DINESH KUMAR (Expert)
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26 July 2011 1. Yes,there is no registration of H.U.F.
To create H.U.F. open a bank account in the name of H.U.F. and get PAN for H.U.F. For the purpose of PAN Identity and address proof of Karta may be given.
2. Yes, your father can convert property received in inherittence as property of H.U.F. As inherited property is property of family and not of the individual so section 64(2) shall not apply in this case.
3. Any one can give gift to H.U.F. and this shall increase the corpus of H.U.F.
However, any memeber of H.U.F. can not transfe his own property to H.U.F. and if he does so section 64(2) apply and income from such property shall be deemed to be icnome of that individual.
To byepass section 64(2) individual can transfer his property/money to H.U.F. and that money can be invested in exempted source. And that income can further be invested and income from that reinvested income shall be deemed to be income of H.U.F.