An HUF cannot be created by mere paperwork, and one cannot become a member of any HUF by choice. He is born into it. If you want to create an HUF, simply get married. You and your wife can constitute a HUF. (Hindu Union).
Once an HUF is created, it will remain inert like a baloon without air. Capital needs to be infused into the HUF. Without capital an HUF is like a Motor Car without tyres. Once you have fit the tyres, the car can begin moving i.e an HUF can truly come into operation.
How do you bring capital into an HUF?
To prevent Tax evasion, the government has introduced various clubbing of Income provisions. If you, the Karta or any member of HUF makes a gift of any money (without consideration), then any income arising from such money will be clubbed in the Individuals hands.
How to Overcome this obstacle?
1.) If you have a friends or relatives, tell them to make a gift directly to your HUF. Then, use this fund to start the HUF business.
2.) if you have a bigger HUF, that is the HUF of your father, you can ask him to make a gift directly to your HUF.
3.) There is no bar in investing exempt money into the HUF. If you have any investment which earns exempt income, redirect that to the HUF.
There is no bar on an HUF carrying on business. It can carry out business activities.
Please apply for a PAN card in the the Following name: Name of the Karta (HUF).
You can submit documents like Passport copy of Karta & Ration Card (showing details of family members)