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A Hindu Undivided Family is a family which consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. Hindu Undivided Family is treated as a person under section 2(31)​ of the Income-tax Act, 1961. HUF is a separate entity for the purpose of assessment under the Act. A HUF cannot be created under a contract, it is created automatically in a Hindu Family. Jain and Sikh families even though are not governed by Hindu Law, but they are treated as HUF under the Act.

For the formation of HUF, we need to make a HUF deed. HUF deed is a legal document that consists of co-parceners lineally descended from a common ancestor. The co-parceners of the Hindu undivided family also include all persons lineally descended from a common ancestor and include their wives and unmarried daughters. A coparcener is a person who is entitled to his/her share of the property.

HUF is also formed with or without a legal deed, but it is always advisable to pursue a business with a written document. HUF deed is a legal deed consisting of details of membership of the HUF, the source of funds, and such other details as may be prescribed on it. The Deed acts as proof of the existence of the entity that has been formed.

What is HUF and how to make HUF deed

Agreement of HUF

This agreement of HUF is executed amongst the following persons.

No

Status of person

Name

Address

Age

1

Karta

   

Adult

2

Co-parcener [also write relationship with the karta, like the wife of the karta, son of the karta, daughter of karts, etc.]

   

Adult

 

Persons agree as follows

Section

Particulars

Name of HUF

 

Address of HUF

 

Date of commencement of HUF

 

The above persons are jointly referred to as co-parceners. The karta do with this declare that he/she is the karta of the HUF and persons as mentioned above are co-parceners of the HUF. Further, the karta received on behalf of the HUF the following gift from their Father which formed the corpus of the HUF.

Nature of Gift

 

This agreement is made on the following stamp paper.

Amount of stamp paper

 

The identity number of stamp paper

 

Persons have read and understood this agreement and solemnly affirm that the information above is true and correct and agreed to acknowledge the same without any pressure from any side and provide the signatures.

Date

 

Place

 
 

Karta

Signature of Karta

Photo of Karta

Co-parcener

Signature of Co-parcener

Photo of Co-parcener


 

Published by

Ashok Pitroda
(Accounting Professionals)
Category Income Tax   Report

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