D. JOINING THE HUF
1. There is no need to fill an application form or submit KYC documents for joining an HUF.
2. All lineal descendants of the karta, their spouses and children automatically become members of
his family.
2. Wives join the HUF as members, while children join on birth as co-parceners.
3. Even the unborn child of a member or co-parcener has an equal share in the HUF.
4. In fact, married women have rights in two HUFs – their father’s as a co-parcener and their husband’s as a member, although they cannot start an HUF on their own.
5. In case a karta does not have male heirs, the HUF property will have to be partitioned among his daughters, hence it is best to write a will to this effect to avoid disputes.
E. COPARCENARY INTEREST IN HUF
1. A coparcener’s interest devolves by survivorship to other coparceners and not by succession.
2. But, if a deceased Hindu has left a surviving relative specified in Class I of the Schedule to the Hindu Succession Act, 1956, his/her interest in Mitakshara coparcenary property does not go by
survivorship, but will devolve by testamentary or intestate succession to his/her legal heirs.
3. If the share of the coparcener is devolved to the legal heir by succession, he acquires indefeasible interest in the HUF that will remain undiminished.
4. His/her share will be determined as if the notional partition has taken place immediately prior to the death of the coparcener.
5. A coparcener is entitled to will away his coparcenary interest in the family.
F. INVESTMENTS BY AN HUF
1. The investments by an HUF are made by the karta either in his own name or in the HUF’s name.
2. The karta must carry out investments on behalf of the HUF and needs to submit the relevant documents.
3. The Know Your Customer (KYC) process is mandatory for all types of investments, for which a non-individual KYC form needs to be filled by the karta.
4. The PAN of karta and HUF, deed of declaration of HUF or list of co-parceners, bank pass-book / statement in the name of the HUF, photograph, proof of identification, and address proof must be submitted at the time of KYC.
5. The HUF demat account is managed by karta on behalf of the co-parceners.
6. The demat account opening form, along with documents mentioned above, need to be submitted for opening the account.
7. The karta needs to sign the form under the HUF stamp, and for mutual fund investments, the PAN and KYC acknowledgement must be submitted.
8. The PAN has to be submitted if the investment is made in micro financial products like SIPs, where the aggregate of instalments in a rolling 12-month period or in a financial year does not
exceed Rs.50,000 per investor.
9. The HUF as an entity cannot invest in government’s small savings schemes, such as the PPF, NSC, monthly income schemes, recurring deposits and other time deposits.
10. The HUF accounts cannot be opened with joint holders, and no nominee can be appointed for the HUF accounts.
1. There is no need to fill an application form or submit KYC documents for joining an HUF.
2. All lineal descendants of the karta, their spouses and children automatically become members of
his family.
2. Wives join the HUF as members, while children join on birth as co-parceners.
3. Even the unborn child of a member or co-parcener has an equal share in the HUF.
4. In fact, married women have rights in two HUFs – their father’s as a co-parcener and their husband’s as a member, although they cannot start an HUF on their own.
5. In case a karta does not have male heirs, the HUF property will have to be partitioned among his daughters, hence it is best to write a will to this effect to avoid disputes.
E. COPARCENARY INTEREST IN HUF
1. A coparcener’s interest devolves by survivorship to other coparceners and not by succession.
2. But, if a deceased Hindu has left a surviving relative specified in Class I of the Schedule to the Hindu Succession Act, 1956, his/her interest in Mitakshara coparcenary property does not go by
survivorship, but will devolve by testamentary or intestate succession to his/her legal heirs.
3. If the share of the coparcener is devolved to the legal heir by succession, he acquires indefeasible interest in the HUF that will remain undiminished.
4. His/her share will be determined as if the notional partition has taken place immediately prior to the death of the coparcener.
5. A coparcener is entitled to will away his coparcenary interest in the family.
F. INVESTMENTS BY AN HUF
1. The investments by an HUF are made by the karta either in his own name or in the HUF’s name.
2. The karta must carry out investments on behalf of the HUF and needs to submit the relevant documents.
3. The Know Your Customer (KYC) process is mandatory for all types of investments, for which a non-individual KYC form needs to be filled by the karta.
4. The PAN of karta and HUF, deed of declaration of HUF or list of co-parceners, bank pass-book / statement in the name of the HUF, photograph, proof of identification, and address proof must be submitted at the time of KYC.
5. The HUF demat account is managed by karta on behalf of the co-parceners.
6. The demat account opening form, along with documents mentioned above, need to be submitted for opening the account.
7. The karta needs to sign the form under the HUF stamp, and for mutual fund investments, the PAN and KYC acknowledgement must be submitted.
8. The PAN has to be submitted if the investment is made in micro financial products like SIPs, where the aggregate of instalments in a rolling 12-month period or in a financial year does not
exceed Rs.50,000 per investor.
9. The HUF as an entity cannot invest in government’s small savings schemes, such as the PPF, NSC, monthly income schemes, recurring deposits and other time deposits.
10. The HUF accounts cannot be opened with joint holders, and no nominee can be appointed for the HUF accounts.