Vous êtes sur la page 1sur 6

Hindu Undivided Family

In Ancient India, there was a system called ‘Dayabhaga System’ in which the
father has the all power of joint family property as well as he has the
executive power and no member of the family can enforce to divide the
property or to claim his/her share as long as the father alive.

But a new law ‘MITAKSHARA LAW’ differs this system as the property can be
divided in tenure of father alive.

The ‘Dhayabhaga System is in West Bengal and eastern seven states. Rest
of the country is governed by ‘Mitakshara law’.

The Indian government has amended these laws and bring inline one law
which is called’ HINDU UNDIVDED FAMILY’ law or ‘HINDU SUCESSION ACT
1956.

Moreover government has amended some changes in this law on 9th


September, 2005.The amendments are as follows.

1- The daughter could also be a coparcener like the sons of the HUF.

2- She also continues to be a coparcener after her marriage of that


family whether she also will be a member of HUF of her husband.

3- Coparcener is the person who has the right to demand the share of
the property of family if he/she wants to part away with the family with
his/her share.

4- The degree of the coparcener limited to four degree and not all the
members of the family are coparcener which is as follows.

- First time holder of the property

- Sons & Daughter


- Grandsons

- Great Grandsons

5- For creating the HUF one need to get married, as soon as one take
seven circles(SAATH PHERE) the HUF created. There is no need to have child
or children for creating the HUF.

6- No unmarried man can’t create a HUF. One should marry first to


create HUF. The Hindu is always a member of HUF as soon as he/she takes
birth of his family. But to create own HUF one must marry first.

7- The KARTA which is the Hindi word means ‘DOER’ has the immense
power of all the affairs of the family more than any of the coparcener.
Usually the KARTA is the father of the family who has the right to do all the
things for the family.

8- The female could also be a KARTA as the amended HINDU


SUCESSION ACT in 2005 when the father misfortunately dies and she has no
brother. In that condition the daughter or the mother can be the KARTA.

9- In HUF there could be all the females’ members also when the
husband dies and she has no sons.

10- The HUF can’t be a partner of the firm as the HUF is not a person
whereas the KARTA of HUF can be a partner of the firm.

11- HUF can pay remuneration to the KARTA of family for the interest and
expenditure to run the family business. in Jugal KishoreBaldev Sahai v. CIT
63 ITR 238 (SC), the Supreme Court held that "if a remuneration is paid to a
Karta of the family under a valid agreement which is bona fide in the interest
of an expedient for the business of the family and the payment is genuine
and not excessive, such a remuneration must be held to be an expenditure
laid out wholly and exclusively, for the purpose of the business and must be
allowed as an expenditure under section 10(2)(xv)[corresponding to the
present-day Section 37(1)] of the Act".

12- Partition of HUF: - Partition of HUF is also a big question. The Income
Tax Law doesn’t allow to partial partition of the property of HUF. Reason is
that people sometime do partial partition of the family only to bring more
income tax files and to decrease their tax liability. So if a HUF is partitioned
it should be fully partition like each and every assets as well as liability.

HOW THE HUF CREATED AND CREATE CAPITAL

These are the steps to create capital of a HUF.

1- First one should open a bank account with the name of Hindu undivided
family like RAMESH HUF with a stamp, ID Proof and the proof of the
members of the family of HUF.

2- Next is to apply for PAN (Permanent Account Number) of the income tax.

3- Now transfer money by gifts etc to HUF capital keeping in view the
clubbing provisions and tax on gifts under Income tax act, Remember there
is no Tax on gifts in kind though they may attract clubbing provisions in
some cases.

4- Stranger can gift HUF but nor more than 50000 rupees as per section 56
of income tax act.

5- A Father can gift to his son’s newly created HUF and not for his son but to
his family according to 64(2) and 56(2) of the income tax act.

6- HUF funds and the affairs of the HUF are completely differs from one’s
own affairs. One can do his/her business/job freely while having the member
of HUF. But HUF income and individual income are different and to be taxed
differently.

Tax benefits of HUF

The HUF status for a Hindu, assumes importance because of the tax benefits
associated with the income tax and wealth tax laws. As per the laws, an
individual having personal income and HUF income would be entitled for an
exemption in his individual as well as the HUF income.

Also, he would be eligible for a further tax deduction or exemption, under


Section 80C in respect of LIC premium, PPF contribution, NSC, etc., both on
individual and HUF income separately.

Under the Wealth Tax Act, 1957, separate exemptions are available for
individual and HUF properties.

Under HUF status, immovable property, jewellery and motorcars get extra
exemption under Wealth Tax Act as well.

Under Section 171 of the Income Tax Act, partial partition of an HUF is not
recognized in law. Hence the important aspect of Income Tax Act, 1961 to
be borne in mind is that, only a complete partition of the HUF is permitted.
The Income tax rates / Slabs for A.Y. 2008-09 & P.Y. 2007-08 are as
follows:

For any other individual, every HUF/AOP/BOI/artificial judicial


person-

Net Income Range IT Tax rates


Up to Rs. 1,10,000/- Nil
Rs.1,10,000/- to Rs.1,50,000/- 10%
Rs.1,50,000/- to Rs.2,50,000/- 20%
Rs.2,50,000/- and Above 30%

Firms:-

A firm is taxable at the rate of 30% for the Assessment Year 2008-09.

Surcharge: 10% of Income Tax if net income exceeds Rs. 1 crore.

Nil if income does not exceed Rs. 1 Crore.

Companies:-

A domestic company is taxable at the rate of 30% for the Assessment Year
2008-09.

Surcharge: 10% of Income Tax if net income exceeds Rs. 1 crore.

Nil if income does not exceed Rs. 1 Crore.