Hindu Undividable Family
The term HUF stands for ‘Hindu Undivided Family’ and comprises of all descendants of a common male ancestor and includes their wives and unmarried daughters. The term of HUF is not defined in income tax law; it is defined under the Hindu Law as a family.
The family continues to exist even after the death of the common ancestor and the next eldest male member becomes the head of the family or the “Karta”. In financial terms, we can call him ‘manager of the family’. Even on the death of all the male members, the HUF continues to exist.
The term ‘Hindu Undivided Family’ (HUF) is defined under Hindu Law. so it can’t be created by an agreement between two parties, nor can it be formed by a group of people who do not constitute the family. Buddhists, Jains, and Sikhs can also form HUF.
Conditions to be fulfilled to create an HUF:
- HUF should only be formed by a family.
- HUF is automatically created for newly added member of the family at the time of their marriage.
- HUF in general consists of a common anscentor and all of his descentors including their dughters and wives,
- Buddhists, Jains, Hindus and sikhs are able to form HUF.
- HUF often has assets which come as will, gift or ancentral property,
- Once the HUF is created, the bank account should be created in the name of the HUF. A PAN number will be generated in the name of HUF.
However, transfer of ownership and issuing ownership options to employees (ESOP) are more challenging. If you are a high-growth aspiring startup and seeking external funding, Private Limited Company Registration may be a better option for you.
You can contact us for more information, on filing your Hindu Undividable Family and also for resolving your complex queries and easily meet our team of experts by calling on +91 9409810715 or mail us your query at contact@aeldraconsultancy.in.
