What is a HUF?
HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. HUF is taxed separately from its members. A Hindu family can come together and form a HUF. Buddhists, Jains, and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independent of its members.
Documents required for HUF Account:
- PAN for Identity
- Bank Statement for Address as well as Bank Account details
- PAN , Photograph and Aadhar ( or any other address document) of KARTA
- Photograph of all the Coparcener
Additional documents in case of Trading in Derivatives Segments - illustrative list:
Documents as per risk management policy of the stock broker need to be provided by the client from time to time.
- Copy of ITR Acknowledgment.
- Copy of Annual Accounts.
- Net worth Certificate.
- Copy of Demat account holding statement.
- Bank account statement for last 6 months.
- Self-declaration with relevant supporting documents.
- Any other relevant documents substantiating ownership of Asset.
Account opening process:
Step 1: Download account opening form from the given link:
HUF Trading & Demat Account Opening Form
Step 2: Fill the form with all the required information.
Instructions to fill the form:
- Affix passport size photograph of Karta and Coparcener on page no. 3 and sign across it. Sign all areas marked with ‘ ’.
- Coparceners signature on POA page
- Fill separate Individual KRA Form for Karta
- Fill two Witnesses Name, Address and Signature.
- Attach self attested document as mentioned here in above
- Name to be filled as per Income tax registration / PAN card.
- Address mentioned on the KYC form should match exactly as per proof submitted.
Step 3: After filling of the form with all the required documents, send us the scan of form to [email protected] for one more round of checking.
Step 4: KYC Team will check the scan image of the form and revert you, if there is any further requirement.
Step 5: Post confirmation from KYC Team, courier the form to our Mumbai or Bhilwara office
Step 6: After receiving your courier we will do the further process of account opening, including IPV of Karta and you will receive an email stating Account opening.
References:
The term ‘Hindu Undivided Family’ (“HUF”) or ‘Joint Hindu Family’ is not mentioned or defined in the acts: Hindu Minority and Guardianship Act (1956), Hindu Marriage Act (1955), Hindu Succession Act (HSA) (1956) and Hindu Adoptions and Maintenance Act (1956), however, the Income Tax Act, 1961 makes a HUF a taxable entity under Section 2(31).
Under Section 2(4) of the Kerala Joint Hindu Family System (Abolition) Act, 1975, the expression ‘Joint Hindu Family’ is defined as an undivided Hindu family governed by the Mitakshara Law.
Who is a Karta
Karta is that adult male coparcener of a HUF who has the responsibility and authority to manage the affairs and assets of the HUF. Traditionally, Karta has been the eldest surviving male member of the HUF. However, in case the only surviving members of a HUF are a woman and her minor son and daughter or daughters (if any), the son would have been the Karta acting through his natural guardian i.e. minor’s mother. Thus, the woman would be the de facto Karta of the HUF.
According to Article 236 of the Mulla Hindu Law, “Karta” can be defined as: “Manager - Property belonging to a joint family is ordinarily managed by the father or other senior member for the time being of the family: The Manager of a joint family is called Karta.”
A Karta holds very distinctive position in the HUF. This unique nature of the karta is in reference to the diverse powers he holds whilst performing his tasks as the decision maker in a range of respects of the family. Karta is not accountable to any member of the family until it is a matter of misappropriation or fraud, in event of either, he is to give an answer.
