Huf (urgent please)


My father created a HUF and he bought one property under HUF. His wife is no more. IN the family, he has 2 elder married daughters and one adult unmarried son. He is the Karta and the son is part of HUF. 

1. My question is my dad wants to sell the property and he feels that I'm not well settled so he wants to give me the whole sale amount of the property as his two daughters are well settled. Can he do that? can the daughters or their husband or their children take any objection.  

2. My other question is my father has made a will in which he has made me the sole owner of the HUF property after him and has given me the control of the HUF property. Can his daughters create any objection in the running of the property or sale of the property.

THanks. Looking forward to an ungent reply.

 
Reply   
 

Hello , i am  not a Lawyer, but since i also have a similiar case of HUF, I have studied the same . According to the Hindu succession act amendent and as per the same if the Father is alive and HUF exists , ther daughters have equal right after 20th Dec 2004. In case Father has partianed the property through a proper deed registered before 20th Dec. 2004 then the daughters have no right on the property. Also if Father has made a will and expired before 20th Dec 2004, then the new law is not applicable for the daughtersto get equal right. In your case since the father is alive and amendment has come , the daughters have equal right.

 
Reply   
 


Freedom

 

I was going through the below defination of HUF but feel that the will left over by your father would superseed .

 

HUF is defined under the Hindu Law as a family that consists of all persons lineally descended from a common ancestor, including wives and unmarried daughters.This means your membership into a HUF does not come from a contract but from your status.A HUF cannot be formed by a group of people who do not constitute a family; lineal descendents with a common ancestor is a must.In Maharashtra  unlike other states, even married daughters are recognised as HUF members.Who are the players in a HUF?

A HUF consists of:Karta

The karta has to be the oldest male in the family. If he passes away, his wife cannot become the karta. His eldest son will take his place. If he chooses not to, he can give up his right and the next son in line can take his place.

Coparceners

This is what all the male members are referred to as.

A Hindu coparcenary includes the sons, grandsons and great-grandsons of the holder of the joint family property. By virtue of their birth, they acquire an interest in the property.

Members

The female members are simply called members.

 

 

Why is it important?

Under the Income Tax Act, a HUF is treated as a separate entity for the purpose of assessment. From this stems its importance.

However, the income of a joint Hindu family can be assessed as the income of a HUF Hindu only if the following two conditions are satisfied:

There should be a coparcenary.
There should be joint family ancestral property.

Other investments too can take place under the broad head of HUF.

For instance, a HUF can open a bank account in its name. The karta must open a HUF bank account in any bank by giving an undertaking on a stamp paper of Rs 100. The format will be supplied by the bank.

A demat account to buy shares can also be opened. Even post office deposits and a Public Provident Fund account can be opened in its name.

Which income is regarded as HUF income?

There are five heads of income:

1. Salary
2. Profits from business or profession
3. Income from house property
4. Capital gains
5. Income from other sources

Since the HUF is a separate entity, it can earn income from all the above except income from salary.

All income that arises on the investment of the HUF's funds and utilisation of its assets is regarded as income and is separately assessed and taxed.

How is it taxed ?

Though the HUF is taxed as separate entity, the tax slab which is applicable to an individual is applicable here too.

It also enjoys the Rs 1,00,000 deduction under Section 80C.

All the income tax slabs and deductions and exemptions available to individuals are also available to the HUF.

Let's take the case of Anil Shah.

He is a salaried individual but his family runs a business and owns a lot of property. Hence, they formed a HUF.

Anil will be individually taxed on his salary and all the tax breaks and deductions and exemptions will be applicable to him.

The HUF earns money from the business as well as rent from renting out the properties. The HUF will be taxed according to the various tax slabs and all the exemptions and deductions will also be available to it.

Let's say after paying the taxes, the HUF has a lot of profit. This profit can be divided to all the members and it will be totally tax-free in their hands since the tax has already been paid by the HUF.

Can it be partitioned?

Yes, the HUF can be partitioned.

This is actually a division of property where the share of each member is determined.

Only a male member -- a coparcener -- can enforce a partition. Female members cannot enforce a partition but are entitled to a share of the division (as per the Hindu law).

The shares are then divided between:

~ All coparceners
~ A son in the womb of his mother at the time of partition
~ Mother (gets an equal share if there is a partition between the sons and her husband has passed away)
~ Wife (gets a share equal to that of a son at the time of partition between father and sons)

If the karta passes away, the assessing income tax officer should be intimated of his death and the appointment of the new karta.


 
Reply   
 

LEAVE A REPLY


    

Your are not logged in . Please login to post replies

Click here to Login / Register  



 

  Search Forum








×

Menu

Post a Suggestion for LCI Team
Post a Legal Query
Muslim Personal Law     |    x