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HUF Formation on Marriage

Shobhit (CA, CS) (100 Points)

06 December 2010

Hi,

Can new HUF be formed just after the marriage. i.e. can the Husband and wife (without giving birth to the child) form the HUF, with Husband as Karta. Or is it necessary to have a child ?

They neither have any ancestoral property, nor want to involve their parents in the new HUF.

Pls reply

Thanks in advance

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12 Replies

Surbhi Garg (Chartered Accountant) (64 Points)
Replied 06 December 2010

Yes it is necessary to have a child for creation of huf

The phrase “creating an HUF” is really quite misleading because an HUF comes into existence the moment you give birth to a son or a daughter.

No HUF can be formed unless your HUF has assets and is deriving income from those assets. Put another way, in order for an HUF to exist on tax records, it needs to have income.

I think its not necessary to include parrens in your huf.

2 Like

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Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 06 December 2010

Thanks For Clarification

Shobhit (CA, CS) (100 Points)
Replied 06 December 2010

Thanks Surabhi.

Even i am of the same view. But I have come accross an article which states that the HUF gets created just after marriage. And this is what confusing me.

The link to same is:

https://www.simpletaxindia.org/2008/05/how-one-can-create-hufhindu-undivided.html

It states that:

he most frequently asked question about HUF is: How does it come into being? To form an HUF, all you have to do is Get Married. The HUF gets created as soon as you complete the seven (or four,whatever) circles round the holy fire and become Man and Wife.
There have to be a minimum of two people to constitute a family. The husband and wife together make up a family. They don't have to wait till they have a baby to constitute their HUF. "

Pls suggest

CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114225 Points)
Replied 06 December 2010

To form an HUF, all you have to do is Get Married. The HUF gets created as soon as you complete the seven (or four,whatever) circles round the holy fire and become Man and Wife.
There have to be a minimum of two people to constitute a family. The husband and wife together make up a family. They don't have to wait till they have a baby to constitute their HUF.

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CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114225 Points)
Replied 06 December 2010

Also see the attached file for more details...

Attached File : 45 9 all you want to know about huf 1.doc downloaded: 1638 times

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Shobhit (CA, CS) (100 Points)
Replied 06 December 2010

Thanks Sanjay ji for sharing the file. Very useful

This file states that if the HUF consists only of Husband and wife, then the tax burden will be on the individual only and not on HUF. so there's no benefit of such an HUF.

Minimum number of coparceners. An HUF can consist of just two members, one of whom is a coparcener. However, for tax purposes, the income of such an entity would not be taxed in the hands of the HUF; it would be taxed in the hands of the sole coparcener. For an entity to be taxed as an HUF, it should have at least two coparceners. Thus, the income of an HUF consisting of a husband and wife would not be taxed in the hands of the HUF, except in cases where the husband has received funds on the partition of a larger HUF.

(Guest)

thanks sanjay sir for sharing this file

Shobhit (CA, CS) (100 Points)
Replied 06 December 2010

Thank you all for your valuable replies.

I have come accross a case law which clears that HUF can be in Existence with Husband and wife as its coparcenor, member respectively.

Commissioner Of Income Tax vs Arun Kumar Jhunjhunwalla & Sons.

Link for the same:

https://www.indiankanoon.org/doc/652055/

Thanks again

1 Like

(Guest)

thanks sanjay sir for sharing

CA. MUKESH KUMAR (CHARTERED ACCOUNTANT) (183 Points)
Replied 06 December 2010

I m agree with Surbhi Garg because after change in Hindu Succession Act girl has right in her father's property, she is member of HUF of her father's HUF. So HUF comes into existence the moment you give birth to a son or a daughter.Even wife can not sign the return of income tax of HUF because she is not the member of HUF.Opinion of Mr. Sanjay Gupta based on old legal position.