09 November 2017
Joglekar Sir, thank you for your reply, but there is no formal partition done yet of the HUF as after the Karta Expires, the HUF will not continue as it has 3 married daughters as co-parcerners. The daughters do not want any share in the property and therefore the shares were transferred in the personal name of Karta. What will be the tax liability in this case?
10 November 2017
After the cut off date, where there are daughters, they have rights equal to sons. If there is going to be partition, the same has to be evidenced only through a registered partition deed, as far as shares of daughters are concerned. If no such registered partition has been done, then it cannot be said that the shares of daughters had been transferred to the individual name of the father-karta. In such case, a family settlement deed can be executed wherein the shares of daughters can be assigned to any person in the family. There will be no exigibility to income-tax, as there is no "gift" in a family sttlement.
10 November 2017
A deed of family settlement is almost similar to family partition. Where there are some disputes in the family and the members want to end the dispute, they can enter into a family settlement. Members D1 and D2 will state that they are giving up all their rights in the properties, in favour of so and so. Wiser to execute it as a registered deed. Stamp duty is not high in many States for this. Only through a registered deed, further hassles with State Government and revenue officials for transfer of name in revenue records will be easier.
10 November 2017
Sir, one more question. In the said HUF, there is no immovable property, only shares and fixed deposits with bank. Do we still need to register the family settlement deed?
11 November 2017
Where there is no immovable property, then it might suffice to have it notarized. See the link http://revenueharyana.gov.in/html/Registration_of_documents/FamilySettlement.pdf for model deed. Advisable (not mandatory) to give Rs 10,000 cash to each daughter.
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