Below clarifies your various questions before us;
1. The concept of HUF under Hindu law as well as Income-tax Act, 1961 is the same. HUF is purely a creature of law and cannot be created by an act of parties (except in case of adoption and reunion). A HUF is a fluctuating body, its size increases with birth of a male member in the family and decreases on death of a member of the family.
2. Females go and come into HUF on marriage. In case of a sole male Hindu, strictly speaking, a HUF comes to existence automatically upon his marriage. It has been held Ref: Gowli Buddanna Vs. CIT [(1966) 60 ITR 293(SC)] that to constitute a joint Hindu family, it is not necessary that there has to be more than one coparcener in the family; a husband and wife can validly constitute a HUF.
3. A single person cannot constitute HUF. There has to be minimum two members to constitute a HUF. Ref: C. Krishna Prasad v/s. CIT [(1974) 97 ITR 493 (SC)].
4. To constitute a HUF, it is not necessary that there has to be minimum two co-parceners or minimum two male members in the family. In the given case, the HUF of the father will continue even after death of the father, with the son as Karta and other family members of the family as its members.
5. A HUF can acquire properties from various sources viz., on partition, by way of gift, through will, accretion to the existing properties, blending, by joint labour, etc. However, after the codification of major aspects of Hindu law in 1956, the concept of ancestral property is considerably diluted, as there is now a clear demarcation between individual property and HUF property of a Hindu male. Self acquired property of a Hindu male will pass on to his legal heirs as per the rules of succession and the legal heirs receive the property as individual property. So also the share of the deceased co-parcener in HUF, which otherwise devolves by survivorship to other co-parcener goes by succession to legal heirs, which they hold as separate property, if such co-parcener has left certain class of female relatives or a male relative who claims through such female relative, specified in Class I of the first schedule to Hindu Succession Act, 1956.
6. A co-parcener can blend his self-acquired property with that of HUF by throwing his individual or self-acquired property into family hotchpots or by impressing such property with the character of HUF property.
7. The act of blending does not require consent of other members of the family. The act is an unilateral act and is a matter of individual volition. There is no question of family either accepting it or rejecting it. Such blending does not constitute a transfer. Ref : CIT Vs. A. Krishna Murthy [(1978) 113 ITR 133 (AP)]
8. The clubbing provisions under S. 64 (2) of the Income-tax Act as well as S. 4 (1A) of the Wealth-tax Act are specifically introduced to tax income / wealth arising from such blending. Under the Income-tax Act, the income arising from such converted property will be deemed to be income of the transferor individual. Moreover, on partition of such property, in case such property is distributed to wife of such individual, the income arising there from shall be continued to be taxable in the hands of the transferor individual. Similarly under the Wealth-tax Act, the converted property is deemed to be the asset belonging to the individual and when such converted property has been the subject matter of partition, the converted property or any part thereof, which is received by wife of the individual on such partition, shall be deemed to be the property belonging to such individual and as such will be includible in the wealth of such individual.
9. The responsibility of Karta is to manage the HUF property. He is the custodian of the income and assets of the HUF. He is liable to make good to other family members with their shares of all sums which he has misappropriated or which he spent for purposes other than those in which the joint family was interested.
10. Before coming into force of Hindu Succession Act, 1956 and Hindu Adoptions and Maintenance Act 1956, it was possible to constitute HUF consist of only female members. There are some old judicial pronouncements to the effect that there cannot be end of a HUF, if the sole co-parcener dies and such HUF consisting of widow/unmarried daughters of such co-parcener, can continue for the time being. The reason was that on subsequent adoption, HUF could still be revived. However, after the enactment of the Hindu Adoptions and Maintenance Act, 1956 as well as Hindu Succession Act, 1956, this legal position does not seem to be correct. This is because such female members, upon such death, would get their interest in the property absolutely and their absolute interest so crystallized cannot be divested by any subsequent events, for example, remarriage or adoption.
11. As far as the State of Maharashtra is concerned, any female member of a HUF who is unmarried as on 22-6-1994, for all practical purposes, is to be regarded as a coparcener in her own right in the same manner as the son and shall have the same rights under the coparcenery property as she would have had, if she had been a son; inclusive of the right to claim by survivorship. She shall be subject to the same rights and disabilities in respect thereof as a son.
12. No, after the marriage of female member after 22-6-1994, the daughter would continue to be a member of her father’s family and also would become member of her husband’s family. What happens now here is that she continues to be a coparcener of her father’s HUF though she ceases to be member. A very peculiar position will arise inasmuch as such daughter, upon her marriage, will automatically become a member of her husband’s family while she will continue to be co-parcener in her father’s family.
13. Income arising to the HUF can be assessed in the hands of the HUF only. Share of a coparcener/member is not assessable in his hands and is exempt u/s. 10(2) of the I.T. Act, 1961. However because of deeming/clubbing provision contained u/s.64 (2) of the Act income in respect of converted/impressed property shall be assessed in the hands of the declarant.
