Demat Account for HUF

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An NRI family with an existing HUF Savings Account is enquiring about opening a new Demat account for their HUF. They wish to transfer their existing shareholdings from their personal NRI Demat accounts to this new HUF Demat account. The primary motivation is to segregate assets and exclude them from their Indian and US wills. However, it's noted that such transfers may not offer Capital Gains Tax advantages due to clubbing provisions.

Chhabilbhai Thakkar

Chhabilbhai Thakkar (Querist)
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25 September 2021 I have HUF Savings Account since 1985, My HUF is consist of wife, and two sons. Being NRI
family now, Can I open Demat HUF account ? and transfer holdings from my NRI Demat accounts to the new proposed HUF Demat account?
Regards
Chhabilbhai

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 September 2021 Yes, you can but for what purpose? Transfer of shares in HUF name will be an additional procedure.

Chhabilbhai Thakkar

Chhabilbhai Thakkar (Querist)
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01 October 2021 Thank you. Purpose is not to cover in my Indian and US will. I will make my SB savings account in to NRO ,saving accounts, and gift my shares to to NRO HUF and open new Demat account etc I will contact in person for your help. Thank you again.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 October 2021 The reason being the transfer will not help in saving CG tax, whenever sold, because of clubbing provision.

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