Is there any formality for opening a bank account in the name of the HUF, other than the Bank formalities.
Like any deed or something???
VARUN
(PCC STUDENT)
(523 Points)
Replied 13 October 2009
no, no deed or other formalities are required ...
Debashis Mandal
(Business & Tax Consultancy)
(341 Points)
Replied 13 October 2009
Dear Praveen,
The deed through which u recd. the gift & start HUF that deed will be needed
Thanks
Debashis
PRAVEEN KUMAR
(MBA (Finance) B.Com.(P))
(3443 Points)
Replied 13 October 2009
Dear Praveen,
THE KEY POINTS IN CREATION OF HUF AND FORMAT OF DEED FOR CREATION OF 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 ___________________________________________ .
2.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.
3. 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 ___________________
4. 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) •
praveen
(Chartered Accountant)
(6971 Points)
Replied 13 October 2009
I asked this query completely for tax planning purpose.
Please help with this situation.
A person has some money with him, he wants to make a FD in a bank for 2 years. Is it possible that he gifts Rs.40,000 to the HUF and open a FD in its name.
Will this account to clubbing of income.
What if he does this every year. Logic says clubbing may apply but what are the legal effects of this kind of deposit.
PRAVEEN KUMAR
(MBA (Finance) B.Com.(P))
(3443 Points)
Replied 13 October 2009
There is no prohibition on a member of HUF advancing loan to HUF, as long as the terms of such lending are not against interests of minor and other family members of the family.
praveen
(Chartered Accountant)
(6971 Points)
Replied 14 October 2009
Originally posted by :Praveen Kumar | ||
" | There is no prohibition on a member of HUF advancing loan to HUF, as long as the terms of such lending are not against interests of minor and other family members of the family. so you can give loan to huf and make the FDR. |
" |
Can such a amount be brought in as capital.?????
Sunil
(Trader)
(2611 Points)
Replied 14 October 2009
HUF exists by law immediately upon a male child being born to a Hindu Couple. You do not need to create it. It should only have property (even money) for the benefit of the HUF. This is the corpus of the HUF and it can come by means of partitioning of an existing HUF of upto the 2nd level of lineal ascendant or by gift specifically for the benefit and use of the HUF. What you need for your bank account opening is the declaration from you that you are the karta of the HUF since its date of existence by law. This is the date the 1st son is born. Even IT will show this as the date of incorporation or coming to existence.
The important thing is that a karta or a co parcener cannot gift to the co-parcenary (HUF) or transfer all their individual assets into the HUF corpus otherwise clubbing provisions are attracted. Therefore people normally take gift from mother or another relative who would not be a part of that HUF. However, that is not an evidence of forming an HUF. That is just establishing the corpus of the HUF.
With its funds, HUF can invest into business or can enter into partnerships. It can invest capital into prorietorship. Remember a few basics:-
If in partnership, the salary drawn by the karta from the partnership will be taxed as business in the hand of the HUF. Also do not make the fatal mistake of doing a commission buiness or profession in the name of HUF. A commission or professional receipt is usually earned by one's individual effort and can never be an HUF receipt even if investment is business is done by HUF. However if capital is invested for trading or manufacturing or other business, the income can be taken as income for the HUF as funds of the HUF has been used to do the business and Karta or even other adult co parceners are obliged to manage the HUF funds systematically for the benefit of the HUF.
Sunil
(Trader)
(2611 Points)
Replied 14 October 2009
HUF can invest its own funds in bank for FD. However, clubbing provisions are attracted if any of the co parceners places his own funds in the name of the HUF.
As far as loan is concerned I do not think any AO will allow the payment of interest to the Karta. It may be clubbed even if it is taken as a loan.
My only advice is do not try such jugglery for such a small amount. Along with HUF PA N Number, the PAN number of Karta also has to be furnished and somewhere down the line you will get yourself into problems. Do not use HUF as a pure tax planning tool. Allow it to delvelop its corpus for more productive use for the benefit of the family instead. Remember that your own proprietorship business ceases to continue with your death but HUF continues till 2 level of lineal descendants. Only the next male member takes over as Karta (or wife in case male member is minor). It at least does not have hassles of incorporated entities and still has a continuity much easier than a partnership firm.
Sunil Liladhar Kotak
(Manager (F & A))
(2025 Points)
Replied 14 October 2009
Originally posted by :praveen | ||
" | Is there any formality for opening a bank account in the name of the HUF, other than the Bank formalities. Like any deed or something??? |
" |
no u just need to fill a simple form & nothing else.
sunil
Rashmi
(Article)
(30 Points)
Replied 19 June 2010
heyy.. i need to draft an amended HUF Deed where one co-parcener, got married and so she is no more a co-parcener. Can anyone provide me with a format resulting in such a change in the HUF deed???
need your help....
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