Wants to close huf
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 February 2013
Dear Expert,
I am filing HUF IT returns from many years .
now i want to close my HUF.
There is investments in Shares, Mutual funds and all around 15-20 lacs.
What is the procedure to close down HUF.??
Pls reply ASAP
I am filing HUF IT returns from many years .
now i want to close my HUF.
There is investments in Shares, Mutual funds and all around 15-20 lacs.
What is the procedure to close down HUF.??
Pls reply ASAP
01 February 2013
Complete Partition- is the only practical way to close your HUF. After partition you have to file the final return.
.
.
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 February 2013
Thank u sir for your reply,
In This case, There are three daughters, Karta and his wife.
HUF (Karta) can transfer entire wealth via Gift to his individual A/c. is it possible?
His daughters are not claiming anything, karta can do whatever he wants ,there is no objection from anyone.
90% of HUF investments are in MF, shares, FD.
Pls reply
In This case, There are three daughters, Karta and his wife.
HUF (Karta) can transfer entire wealth via Gift to his individual A/c. is it possible?
His daughters are not claiming anything, karta can do whatever he wants ,there is no objection from anyone.
90% of HUF investments are in MF, shares, FD.
Pls reply
03 August 2025
Hey! Here’s a detailed answer on **closing an HUF** and your specific query about transferring wealth via gift:
---
### 1. How to **close an HUF**?
* The only practical way to close an HUF is through a **complete partition**.
* Partition means dividing all HUF assets among coparceners (members) as per their share.
* After partition, the HUF ceases to exist for income tax purposes.
* You must file the **final income tax return** of the HUF for the year of partition.
---
### 2. Partition in your case (3 daughters + Karta + wife)
* The **coparceners** in the HUF are the karta, his sons, and daughters (daughters also have equal coparcenary rights now).
* Even if daughters are not claiming anything, legally they have rights to the HUF property.
* So, **all coparceners need to be accounted for** in the partition.
---
### 3. Can Karta transfer entire wealth by gift to his individual account?
* Technically, **gifting entire HUF wealth solely to Karta’s individual account is not legally valid** because the assets belong to the HUF collectively.
* The gift of HUF property can be made only to coparceners or other persons outside the family.
* If daughters waive their rights via a **family settlement deed** (registered), then Karta can receive more share, but such waiver needs to be legally documented.
---
### 4. Recommended procedure
* **Partition the HUF assets** between Karta and daughters, as per agreed shares.
* Transfer assets accordingly (shares, mutual funds, FDs).
* File final HUF ITR after partition.
* Karta and daughters can then hold the assets individually.
* If daughters do not want to claim their share, they can gift their share to Karta afterward (subject to gift tax provisions).
---
### Important points:
* Partition deed should be in writing and preferably registered.
* Partition triggers capital gains tax; calculate and pay accordingly.
* Seek professional legal and tax advice to structure partition smoothly.
---
---
### 1. How to **close an HUF**?
* The only practical way to close an HUF is through a **complete partition**.
* Partition means dividing all HUF assets among coparceners (members) as per their share.
* After partition, the HUF ceases to exist for income tax purposes.
* You must file the **final income tax return** of the HUF for the year of partition.
---
### 2. Partition in your case (3 daughters + Karta + wife)
* The **coparceners** in the HUF are the karta, his sons, and daughters (daughters also have equal coparcenary rights now).
* Even if daughters are not claiming anything, legally they have rights to the HUF property.
* So, **all coparceners need to be accounted for** in the partition.
---
### 3. Can Karta transfer entire wealth by gift to his individual account?
* Technically, **gifting entire HUF wealth solely to Karta’s individual account is not legally valid** because the assets belong to the HUF collectively.
* The gift of HUF property can be made only to coparceners or other persons outside the family.
* If daughters waive their rights via a **family settlement deed** (registered), then Karta can receive more share, but such waiver needs to be legally documented.
---
### 4. Recommended procedure
* **Partition the HUF assets** between Karta and daughters, as per agreed shares.
* Transfer assets accordingly (shares, mutual funds, FDs).
* File final HUF ITR after partition.
* Karta and daughters can then hold the assets individually.
* If daughters do not want to claim their share, they can gift their share to Karta afterward (subject to gift tax provisions).
---
### Important points:
* Partition deed should be in writing and preferably registered.
* Partition triggers capital gains tax; calculate and pay accordingly.
* Seek professional legal and tax advice to structure partition smoothly.
---
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