HUF / Divorce / Bank Account

Learned Friends,

Advise requested as under:

  1. I am undergoing divorce with my wife (Second Motion to be done in July 2023) and as per Settlement Agreement in the Mediation Center of Hon’ble Delhi High Court, wife was supposed to transfer her shares and bank balance valued in total around Rs. 15.00 Lacs in the joint demat and savings accounts respectively to me both of which were in dormant state.
  2. We approached the bank where officer advised that if I open my 3-in-1 account viz savings, trading and demat in same bank to facilitate smooth transfer.
  3. While processing opening of accounts, it was observed that my individual PAN is reflecting in the bank’s system as I held a HUF account with the same bank and the system was not allowing the new individual’s account to be opened.
  4. As there were no assets in the HUF except nominal balance in account and I was not expecting any further activity in the HUF account, my marriage was going to be dissolved soon, my elder daughter is married, younger daughter who is an adult, is aligned towards her mother, I applied to close the HUF account after taking signatures of my wife and both daughters as this was mandated in the Settlement Agreement.  The said HUF account is now closed and new accounts are opened. The process of un-freezing and Re-KYC of wife’s account is in process.
  5. Turns out I took this step in haste as I did not realize that ITR of FY 2023-24 is to be filed which involves an approximate TDS refund of Rs. 30-40,000.
  6. What should I do?
    1. Can I give my individual account number in the forthcoming ITR for refund?
    2. If not, how can I re-open a HUF account maybe in another bank with me and my elder daughter only in the sense my marriage will be dissolved in July 2023, wife won’t remain a member of the family, younger daughter is not on talking terms with me and won’t sign any form.  Elder daughter will readily sign.

Thanks & Regards.

Replies (2)
Quick Summary
A user is facing difficulties transferring funds and shares from joint dormant accounts as per a divorce settlement. The issue arose when trying to open new individual accounts, as a dormant HUF account linked to the user's PAN prevented it. After closing the HUF account (with wife and daughters' consent), the user realised this might impact an upcoming TDS refund. They are now seeking advice on how to claim the refund and potentially open a new HUF account with their elder daughter post-divorce.

Open new HUF account with both of you as coparceners, in another bank after the settlement.

Perfect Resolution by Dhirajlal Sir

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