IYER P.V
Quick Summary
Hindu Undivided Family - Concept Family connotes a group of people related by blood or marriage, "family" always specifies a group. Plurality of persons is an essential attribute of a family A Family consisting of a single individual is a contradiction. Section 2(31)(ii) of The Income Tax Act,1961
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FAQ :
A Hindu Undivided Family (HUF) is a body of persons lineally descended from a common ancestor, including their wives, who are living together jointly. It is treated as a distinct entity under the Income Tax Act, 1961.
Partition under the Income Tax Act is the ascertainment of individual shares of co-parceners in an HUF and the subsequent division of properties by allotting separate assets to each member. For tax purposes, it requires a physical division of property, unlike Hindu Law which may recognise partial partition.
No, partial partition is not recognised under the Income Tax Act, 1961 for tax purposes. Only a completed total partition of the HUF is permitted.
For a valid reunion, there must have been a previous state of union, a partition must have occurred, and the reunion must be effected by parties to the original partition. It requires a fusion of interest and estate, with a clear agreement to revert to the original HUF status.
Yes, reunion can be a useful tax planning tool. Since partial partition is derecognised, reunion allows for the re-establishment of HUF status and can help achieve tax planning objectives that were previously available.
After partition, every member of the HUF before the partition is jointly and severally liable for the tax on the HUF's income up to the date of partition. The extent of several liability of a member depends on the portion of joint family property allotted to them.
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