Huf

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Querist : Anonymous

Querist : Anonymous (Querist)

25 February 2013 IS THERE ANY AGREEMENT WHICH NEEDS TO BE MADE TO OPEN AN HUF? CAN THE KARTA ISSUE A CHEQUE FROM HIS PERSONAL ACCOUNT TO OPEN AN HUF ACCOUNT?

@VaibhavJ

@VaibhavJ (Expert)
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25 February 2013 Hi

No agreement is needed. Yes chq. can be issued from personal A/c of Karta.

Thanks!!

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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26 February 2013 First thing is Creation of HUF is Just a Part of Tax Planning.

You have to apply for PAN in IT Department.
for That You Need HUF Deed.
For Opening Bank Account, You Need HUF Agreement.

HUF Deed is Compulsory to Form HUF.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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26 February 2013 Steps involved in creation of HUFs –

1) Capital and members – For an HUF to be created the major requirements is the capital and persons. Capital can be in the form of ancestral property, assets gifted by relatives and friends, or received by the HUF through a will. The minimum no. of members required is two who can be a husband and wife. Both the spouse can create a family and constitute a HUF. They don’t have to wait till they have a baby to constitute their HUF.

2) Select a suitable name – The HUF to be created should have proper name. Select a proper name for the HUF and the name should not violate the laws or have any negative impact. The members can choose a suitable name before starting a HUF business form.

3) Form a Deed – Formation of HUF should be embodied in a deed which provides that a proper legal deed or agreement is required before creating a HUF. The agreement/ deed should have all the details, including the name of Karta, co-parceners, address and source of funds in the corpus. Deed will facilitate that the business or the formation of HUF is valid and true.

4) Apply for PAN – Application for PAN (Permanent Account Number) is also an important step to be undertaken while forming a HUF. After executing the deed, the Karta is required to obtain a permanent account number PAN for the HUF. Obtaining PAN is a mandatory requirement as all financial transactions shall carry PAN.

5) Open a Bank Account – After PAN has been allotted, the Karta is required to open a Bank a/c in the name of the HUF. It is also advisable to get some stationery printed for official communication. The HUF is now ready to function. The Karta will have to invest in tax saving instruments and file tax returns on behalf of the HUF. Only the money related to the business of HUF shall be invested in such Bank accounts.

Formation of HUF is no more a cumbersome process for any individual. Forming HUF can help you save taxes to an extent.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 February 2013 Thank you so much.Can you also share a draft of huf deed/agreement.
Can the capital also be by way of contribution by karta and coparceners if the other options are not available

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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27 February 2013 For Format, Search on Net.
You Will get.
Else Get Help of Chartered Accountant, He will do All Formalities.

Yes, Capital by Karta and Coparceners.

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