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HUF account

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Sushil Kale

26 Points Joined June 2017

Can HUF open fixed deposit in the name of Karta from the savings account of HUF

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Rama chary Rachakonda

Master in Accounts & high court Advocate

8977 Points Joined December 2011

HUF Fixed Deposit in Karta's Name A Hindu Undivided Family (HUF) can open a fixed deposit (FD) in the name of the Karta (the person managing the HUF) from the savings account of the HUF. However, it's essential to consider the following: -

*Source of funds*: The funds used for the FD should belong to the HUF, and the FD should be opened from the HUF's savings account. - *FD account ownership*: Although the FD is in the Karta's name, the beneficial ownership remains with the HUF. -

*Tax implications*: Interest earned on the FD will be taxable in the hands of the HUF, and the Karta will need to report it in the HUF's tax return. Key Considerations - *Documentation*:

Ensure that the FD is opened in the Karta's name, but the account is clearly linked to the HUF's savings account. -

*Karta's role*: The Karta should act in the best interest of the HUF and ensure that the FD is managed according to the HUF's needs and objectives.

Best Practices - *Maintain clear records*: Keep accurate records of the FD, including the source of funds, interest earned, and tax implications. -

*Comply with tax laws*: Ensure that the HUF complies with all tax laws and regulations, including reporting the interest earned on the FD.

By following these guidelines, an HUF can open a fixed deposit in the name of the Karta from the savings account of the HUF while ensuring compliance with relevant laws and regulations.

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