HUF income tax law

328 views 4 replies
I am karta huf. My son(NRI), & MY Daughter (NRI) are co-Parceners. My wife was also a member, but has died recently. I am 79 years old & cannot hold for long. Can I make him KARTA right now? But being NRI , can he operate SB account? He as well as my daughter has NRO Account already.
2.can I distribute funds among members & close HUF account?
3.After I leave this world, what will become of this huf account?
Replies (4)
1. Your son cannot become Karta right now as you are still alive. The change in Karta is based of death of the oldest member and taken over by the 2nd oldest member alive.

2. Yes he can operate SB ACCOUNT EVEN IF he is NRI. But the HUF will become non resident for tax purposes upon your death as the residential status of Karta determines the residential status of HUF

3. While you are still alive, you should go for complete partition of HUF. It is a tax friendly method to transfer the net assets of the HUF to the members

Regards
CA. Raj Doshi
R C D & Co.
www.rcdco.in
Agree with above comment

I disagree to the answer given for first question. A junior co-parcener can be a Karta, if senior member gives up his right of management and the other co-parcerners consent that such junior co-parcener be the Karta. Alternatively, as a Karta, you can execute a power of attorney in favour of your son for managing the affairs of the HUF, by this he will only be a representative karta. 

As regards your query that whether your son can operate the SB account, ye he can operate. The income-tax implications will change based on circumstances.

Yes, you can transfer all the funds of HUF to the members or alternatively, opt for complete partition. After, your death the senior member of family becomes Karta and he will operate the SB account

Agree with Poojan for the answer to the 1st question.

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