Can huf become a partner in partnership firm

Yes HUF can definately become partner in partner in partnership firm as HUF seperate entity in the eyes of law.

Karta of the HUF can become the partner but not the HUF because only karta has legal entity not the HUF...

Agree with Ankur,

Karta of HUF can become the partner not HUF

So when profits are distributed, will they go to HUF or they need to be filed in Karta's personal income?

In the eyes of Income Tax  Act, HUF is a person so the income of dividend is to be taxed in HUF.

AS per Superem Court Judgment individual person can be partner of partnership firm and Karta can not be partner, refer Rasiklal Mehta case. 

Originally posted by : amolw
	AS per Superem Court Judgment individual person can be partner of partnership firm and Karta can not be partner, refer Rasiklal Mehta case.

As it is said, Karta is an individual person, hence he can be a partner in a partnership firm but not by the name of that HUF firm.

Still not clear : Please choose

1) HUF Can become partner via Karta as Individual, with initial funding from HUF Account - and HUF with its own PAN card will file return for HUF for income received (dividend/profit share)

2) HUF Can become partner via Karta as Individual, with initial funding from HUF Account - and Karta - a person with his personal PAN Card will have to club this income in his individual return and not HUF.

3) HUF Can become partner as HUF(entity) with initial funding from HUF Account - and HUF with its own PAN card will file return for HUF for income received (dividend/profit share)

4) HUF cannot become   partner as HUF(entity)  with initial funding from HUF Account 

HUF can not become partner at all. its Karta can but seperately.

Regards,

So Aditya you are saying that Option 2) is the only possibility?

Or are you saying that HUF funds can't be invested in partnership firm at all?

Mr Drona,

In this synario, you are talking about two diffrent things. One is becoming a partner, the other one is investments in a partnership firm.

HUF can not be a partner in a firm at all but, Karta being a individual person can become partner.

in this case, Karta has the authority to use the funds of the HUF da way he wants, so he can use, but not on the name of the HUF.

Hope this clears your doubt.

Regards,

Aditya.