K. PARTITION OF HUF
1. Every coparcener has a right to ask for partition, which may be total or partial.
2. A partition is total when all properties of the family are divided among the members, and on such
a partition, the HUF ceases to exist.
3. Under Hindu Law, it is not necessary to divide all property by metes and bound, but without that the partition will not be recognized under tax laws.
4. Female members, like the mother or granddaughters, who cannot ask for partition, are entitled to a share equal to that of a son in the event of partition. 5. All coparceners can, after effecting valid total partition, decide to reunite by bringing the entire property back into the HUF, by an act known as reunion.
6. Partial partition is of 2 types:
a) Vis-à-vis property, which means distributing certain property to the members and retaining balance properties with the family.
b) Vis-à-vis person, which implies distributing certain properties to some members of the family, following which such member won’t remain part of the family any longer.
7. In partial partition, an HUF continues to be a separate entity, but the only change is some of the property / coparcener don’t continue to be a part of the family.
L. TAX IMPACT ON HUF PARTITION
1. If the capital or income base of the HUF is large, it may be more viable to make a total partition of the HUF property.
2. On the partition of the larger HUF, each of the married sons will receive the property for and on behalf of his own smaller HUF.
3. If the smaller HUFs are in the lower tax bracket, it will help save tax in view of spreading income of the larger HUF. 4. If a total partition takes place among members of the HUF, which were hitherto assessed to tax, an application for getting this fact recognized will have to be made to the assessing officer.
5. Partial partition is not recognized for tax purposes, and income earned on the property received by a member on partial partition would be clubbed with the income of HUF as if there is no partition.
M. DEMAT TRANSMISSION IN HUF
1. In a HUF, the seniormost surviving member becomes the karta on the
death of the existing karta.
2. The transmission formalities need to be initiated by the surviving members of the HUF in order to effect the transfer of securities from the demat account of the deceased karta to the new karta, or members accounts, as the case may be.
3. If the senior-most member, after the
karta's death, is a daughter, she will become the karta of the HUF.
4. However, the karta's widow is not a co-parcener in his HUF and cannot become the karta.
N. CHANGE OF KARTA IN HUF
1. In the case of mutual fund investments of a HUF) if the karta dies, the individual who takes over needs to submit the following documents to the fund house or its
registrar and transfer agent.
2. If, on the death of the karta, even one co-parcener demands the partition of the HUF, the entire HUF will have to be divided and its assets distributed among the co-parceners.
1. Every coparcener has a right to ask for partition, which may be total or partial.
2. A partition is total when all properties of the family are divided among the members, and on such
a partition, the HUF ceases to exist.
3. Under Hindu Law, it is not necessary to divide all property by metes and bound, but without that the partition will not be recognized under tax laws.
4. Female members, like the mother or granddaughters, who cannot ask for partition, are entitled to a share equal to that of a son in the event of partition. 5. All coparceners can, after effecting valid total partition, decide to reunite by bringing the entire property back into the HUF, by an act known as reunion.
6. Partial partition is of 2 types:
a) Vis-à-vis property, which means distributing certain property to the members and retaining balance properties with the family.
b) Vis-à-vis person, which implies distributing certain properties to some members of the family, following which such member won’t remain part of the family any longer.
7. In partial partition, an HUF continues to be a separate entity, but the only change is some of the property / coparcener don’t continue to be a part of the family.
L. TAX IMPACT ON HUF PARTITION
1. If the capital or income base of the HUF is large, it may be more viable to make a total partition of the HUF property.
2. On the partition of the larger HUF, each of the married sons will receive the property for and on behalf of his own smaller HUF.
3. If the smaller HUFs are in the lower tax bracket, it will help save tax in view of spreading income of the larger HUF. 4. If a total partition takes place among members of the HUF, which were hitherto assessed to tax, an application for getting this fact recognized will have to be made to the assessing officer.
5. Partial partition is not recognized for tax purposes, and income earned on the property received by a member on partial partition would be clubbed with the income of HUF as if there is no partition.
M. DEMAT TRANSMISSION IN HUF
1. In a HUF, the seniormost surviving member becomes the karta on the
death of the existing karta.
2. The transmission formalities need to be initiated by the surviving members of the HUF in order to effect the transfer of securities from the demat account of the deceased karta to the new karta, or members accounts, as the case may be.
3. If the senior-most member, after the
karta's death, is a daughter, she will become the karta of the HUF.
4. However, the karta's widow is not a co-parcener in his HUF and cannot become the karta.
N. CHANGE OF KARTA IN HUF
1. In the case of mutual fund investments of a HUF) if the karta dies, the individual who takes over needs to submit the following documents to the fund house or its
registrar and transfer agent.
2. If, on the death of the karta, even one co-parcener demands the partition of the HUF, the entire HUF will have to be divided and its assets distributed among the co-parceners.