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What is huf

Ramanuj (Accountant.) (834 Points)

17 June 2015

Dear all

I want to lean about HUF account. how to open & accounting process. please give with example.

thanks & regards

Ramanuj

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6 Replies

Shubham chhajed (mumbai) (54 Points)
Replied 17 June 2015

HUF ia artificial Person created by Income Tax Act, 1961

HUF is a family with husband, wife and children (and children’s spouses if any) living together

first apply for PAN card in Form 49A thn open a bank account

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Ajit Bhati (Chartered Accountant) (214 Points)
Replied 17 June 2015

HUF is created under the Hindu Succession Act and not under Income Tax act.The Income Tax Act recognise the HUF as an independent assessable or taxable entity.

Requirement of:

1.PAN - A Huf deed or Affadivit for formation of HUF signed by Karta

2. Open a Bank account based on HUF deed and PAN card

After that you can Start the Business as legally permitted ( Such as Rental Income or Interest income etc.,)

ashish khandelwal (article) (166 Points)
Replied 18 June 2015

How will HUF earned money? Can karta Gift money to huf so that it can start business?

Ramanuj (Accountant.) (834 Points)
Replied 18 June 2015

thanks for reply

Suppose Made HUF Husband wife two child have four member main member have husband. Income tax return file only one or each member ? As wife, childern, suppose that Rental income yearly 8 lacs its divied four memeber or not. how to make income tax computation.

You are requested for experts pls advice as properly.

Thanks in Advance.

Ramanuj

Ajit Bhati (Chartered Accountant) (214 Points)
Replied 18 June 2015

HUF is automatically created. As the name suggests, a HUF means a family of Hindus.However, under the Indian tax law, persons belonging to the Jain and Sikh religion can also form HUFs.The existence of a HUF requires at least two members of a family, of which atleast one should be male.A HUF can also consist of the male members and female members,being their wives and unmarried daughters.Once a member of a HUF receives any ancestralproperty from any ancestor three generations above him, a HUF is automatically created. Forexample, if a married Hindu male person receives any ancestral property from his greatgrandfather, that property will be automatically regarded as his HUF’s property. Another way to form a HUF is by receiving an asset or property by way of gift from a lineal ascendant with a specific instruction by the donor that the same is being gifted to the HUF

All income arising out of utilisation HUF’s properties and from investment of HUF’s funds is income of the HUF and is separately assessed in its hands. One should be careful to declare only that income to tax in the returns of a HUF which is earned out of the HUF assets or investments.Any income, which arises out of personal income of a member will be regarded as the member’s individual income and not the income of HUF.

The Karta Of HUF haave been vested with all powers and also effective management and utilisation of HUF Funds. The Karta has to sign the Income tax return and other documents on behlf of the HUF.