What is HUF? What are the advantages of opening a trading/demat account which is a HUF?

#1

I guess I can open a trading & demat which is in the name of individual, partnership, private/public limited and HUF. My friend was telling that there are many advantages of opening as a HUF, he didn’t give me details, can anyone help?

Also, are the documents required to open the account same as individual? If not, what are the documents required?

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HUF vs Individual account
#2

HUF is Hindu Undivided Family. All the family members are part of it and the head(usually husband/father) is the Karta. It is additional entity that can help to save taxes. From taxation perspective it is taxed similar to individual except that PPF cannot be opened in HUF name.

As such there is no advantage of opening HUF trading account over individual.

Main benefit of opening trading account in HUF is saving taxes. Say suppose both the husband and wife already have taxable income, then they can create trade in HUF and earn additional 2 lac tax free income as per current IT slabs.

There are additional documents required to open trading/demat account which broker will inform you.

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#3

HUF expressed as Hindu Undivided Family.

It is almost similar to Join Account and main Benifit is tax saving.

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#4

Hindu Undivided Family:  HUF is a family with husband, wife and children (and children’s spouses if any) living together. The property owned by this family will be through lineal ascendants or any ancestors. There are a set of laws that govern property ownership, marriages, taxation etc for a legally declared HUF. IT department of India has a format of taxation for a HUF; tax benefits can be availed from this format.

HUF Account: Karta of a HUF is the senior most male member of the family and in financial terms he can also be called manager of the family. In this account a corpus is created where every family member can pool their income. The corpus will be handled by or authorized to handle by Karta (head of the family). Signature of karta will be required for every transaction from the bank. These accounts are similar to individual saving bank accounts; there will be various tax benefits that are available for an individual’s account while the income of members is being pooled in HUF account.

Advantages:

  • Every member of the family can deposit their income in the common corpus.
  • Single person’s authority while participation from entire family.
  • Tax benefits on deposits under various sections. According to IT act, tax rebates and deductions can be availed under sections 80C, 88 and 80L for HUF account.
  • Gifts collected up to a worth of Rs 50,000 will be tax free. A father who owns a HUF account can gift a property or money of higher worth to a son who owns a smaller HUF account; but he should specify that the gift is for the son’s HUF and not to him as an individual. Under section 64(2) and 56(2) tax benefits can be enjoyed in such instance.
  • Corpus can be used for investment in tax free money instruments.
  • Corpus can be divided only on agreement of every coparcener of the family.
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#5

What is HUF?
As the name suggests, an HUF is a family of Hindus. However, even Buddhists, Jains and Sikhs are regarded as Hindus, and can, therefore, set up HUFs. The concept of an HUF has basically evolved from ancient Hindu law.The Hindu Undivided Family can best be defined as a family that consists of a common ancestor and all his lineal male descendants and their wives and unmarried daughters. The Hindu Undivided Family (HUF) cannot be created by acts of any party. The only exceptions are in the case of an adoption or a marriage when a stranger may become a HUF member. 

HUF accounts:-
Karta of a HUF is the senior most male member of the family and in financial terms he can also be called manager of the family. In this account a corpus is created where every family member can pool their income. The corpus will be handled by or authorized to handle by Karta (head of the family). Signature of karta will be required for every transaction from the bank. These accounts are similar to individual saving bank accounts; there will be various tax benefits that are available for an individual’s account while the income of members is being pooled in HUF account.

Documents required:- 
1.Duly filled Trading/Trading & Demat/Commodity form with photograph of Karta affixed and signed across.
2.PAN Card copy of the HUF.
3.Bank Passbook/Bank Statement of HUF indicating its existence.
4.PAN Card copy & Address Proof of Karta.
5.Declaration to be given by Karta & all major co parceners of the HUF.
6.HUF Declaration for Demat account.

Karta should sign the Account Opening Form and other documents under the stamp of HUF.
All KYC documents to be attested by the Karta.

Advantages of opening a trading/demat account which is a HUF?

1. Karta manages the HUF account on behalf of the Co-parceners.
2.Under the Income Tax Act, an HUF is a separate entity for the purpose of income tax return.HUF will also gain from the tax slab structure of computing income tax. 
3.According to IT act, tax rebates and deductions can be availed under sections 80C, 88 and 80L for HUF account. 
4.In the case of HUF, shares can be transferred in the name of the Karta.
5.Corpus can be divided only on agreement of every coparcener of the family.
6.Every member of the family can deposit their income in the common corpus.
7.Corpus can be used for investment in tax free money instruments.

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#6

HUF stands for Hindu Undivided Family. It is a demat account opened for managing securities of a family .The account is managed by a ‘karta’ who is a male member of the family and other members of the family are termed as ‘Co-parceners’. Karta manages the HUF account of behalf of the Co-parceners.

Advantages:

The HUF concept is one of the best ways to save tax

HUF is separate entity and qualifies for all tax benefits under section 80C (up to Rs 1 lakh)

There is another benefit in HUF for women’s where the karta has passed away and left only female descendants in such case the daughter can rule the karta  

Documents required:

  1. Latest color photograph of karta
  2. Copy of PAN card of HUF and karta
  3. Address proof of karta
  4. Bank proof (cancelled cheque)
  5. Copy of Financial details, if opted for trading in derivatives segment
  6. Copy of Demat Client Master / holding statements
  7. HUF stamp should be affixes wherever client signature ( for EQ segment)
  8. HUF declaration duly stamped
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#7

HUF

​It stands for Hindu Undivided Family.Huf is a family with husband,wife & children living together.The HUF is an account which acknowledges that the particular hindu family is undivided in terms of property, profit or loss in the business etc. It implies for everyone in the family who were at the time of creation of the account and also who were not i.e, people who get married to the family. It does not end with a particular generation and continues forever. It can be brought to an end only when every member of the HUF wants to do that.

Features of HUF account:-

There are a few features of HUF account that makes it different from regular saving bank accounts.

  • Every member of the family can deposit their income in the common corpus
  • Single person’s authority while participation from entire family
  • Tax benefits on deposits under various sections
  • Corpus can be divided only on agreement of every coparcener of the family.

A HUF can open bank account in any bank.The type of Bank Account that can be opened by a HUF are savings account,current account or term deposit account.In addition to this,it is also possible for HUB to open accounts relating to browsings from bank by way of cash credi,term loan or any other types of loan.Moreover,a HUF can also open demat account or depository account for the purpose of holding shares of company.

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#8

HUF is a family with husband, wife and children living together. 
The property owned by this family will be through lineal ascendants or any ancestors. 
There are a set of laws that govern property ownership, marriages, taxation etc for a legally declared HUF. 
IT department of India has a format of taxation for a HUF, tax benefits can be availed from this format.

ADVANTAGES & BENEFITS:

-Every member of the family can deposit their income in the common corpus.

-Single person’s authority while participation from entire family.

-Tax benefits on deposits under various sections.

-Corpus can be divided only on agreement of every coparcener of the family.

-Gifts collected up to a worth of Rs 50,000 will be tax free. 
 A father who owns a HUF account can gift a property or money of higher worth to a son who owns a smaller HUF account; 
 but he should specify that the gift is for the son’s HUF and not to him as an individual. Under section 64(2) and 56(2) tax benefits 
 can be enjoyed in such instance.


There are few documents that will be required for opening an HUF account.

-HUF will have a unique PAN card; this PAN card along with the PAN of Karta should be produced.

-A declaration form will be provided where every member has to make a signature stating the name of Karta and declare.

      -They are the only members of HUF.
      
      -Karta to have sole authority over HUF account.

      -Every transaction on behalf of HUF account, made by each member of the family is governed by              karta.

-Residential proof of Karta.

-Identification proof of Karta.

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#9

The bridge that unites marriage with tax planning is Hindu Undivided Family, popularly known as HUF. . which means all members or any member of the family minght be a part of it, the main advantage of HUF is tax savings,.documents required 1.Duly filled trading, demat, commodity form with photograph of Karta affixed and cross signed on it,2.PAN card of the family members who wants to be a part of it,3.Bank Passbook/Bank Statement of HUF indicating its existence.4.PAN Card copy & Address Proof of Karta (In a HUF, the responsibility of Karta is to manage the HUF property.)4.Declaration to be given by Karta & all major co parteners of the HUF.5. HUF Declaration for Demat account.,As soon as Hindu individual is married he can open an account in the name of his HUF and when the child is born, he will automatically become member of his fathers HUF.

Under income tax, HUF is treated as a separate person. So you can divide your income in two parts. Can a salaried individual divide his income? The answer is no. However, suppose somebody has income and he is planning to create some additional income, for example somebody has income of Rs 10 lakh and he is paying tax on that and he is planning to do some additional business where he expects to earn additional Rs 5 lakh. Now because he has already crossed the limit of Rs 10 lakh, so on additional Rs 5 lakh he will have to pay 30 percent tax as per slab.

ref from

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#10

HUF MEANS (HINDUS UNDIVIDED FAMILY)..

Advantages of opening a trading/demat account which is a HUF

​1. Karta manages the HUF account on behalf of the Co-parceners.

2. Under the Income Tax, an HUF is a separate entity for the purpose of income tax return. HUF will aslo gain from the tax slab structure of computing income tax.3. According to IT act, tax rebates and deductions can be availed under sections 80C, 88 and 80L for HUF account.

4. In case of HUF, shares can be transferred in the name of the Karta.

5. Corpus can be divided only on agreement of every coparcener of the family.

6. Every member of the family can deposit their income in the common corpus.

7. Corpus can be used for investment in tax free money instruments.

Documents required:-

1.Duly filled Trading/Trading & Demat/Commodity form with photograph of Karta affixed and signed across.

2. Pan Card copy of the HUF.

3. Bank Passbook/Bank Statement of HUF indicating its existence.

4. Pan Card copy & Address Proof of Karta.

5. Declaration to be given by Karta & all major co parceners of the HUF.

6. HUF Declaration for Demat account.

    Karta should sign the Account Opening Form and other documents under the stamp of HUF.

All KYC documents to be attested by the Karta.

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#11

HUF account is Hindu Undivided Family . The major advantage of opening this type of Trading/Demat account is one can save taxes. One needs a HUF PAN card in order to avail this account.

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#12

HUF is Hindu Undivided Family.

All the family members are part of it. And head is of it is called as Karta.Main benefit of opening trading account in HUF is saving taxes. Say suppose both the husband and wife already have taxable income, then they can create trade in HUF and earn additional 2 lac tax  free income as per current IT slabs.And to open an account we need to have a HUF Pan card.

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#13

HUF is a family with husband, wife and children (and children’s spouses if any) living together called as Hindu Undivided Family.

Advantages of opening HUF trading/demat is tax benefits.The concept of HUF says that apart from individuals there is another separate entity called “Family” which can also have its own assets and liabilities and even regular source of income, which should be taxed separately. For example, if an ancestral residential property is rented out, then the rent arising would be considered as Family’s income and not as income of individual. In real life this rent is shown as income of one individual and he pays the tax on it, however a HUF can be formed and the rent can be shown as the whole family income (HUF) and it can be taxed separately.

Since the account is equivalent to an individual’s account there are various tax benefits. According to IT act, tax rebates and deductions can be availed under sections 80C, 88 and 80L for HUF account.

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#14

HUF stands for Hindu undivided family… The account is managed by a karta who is a male member of the family and other members of the family are termed as Co-parceners…
The main advantage of opening HUF account is Tax liability can be reduced…
There is exemption of tax for the gift collected worth up to 50000 and There are some other benefits also…

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#15

What is HUF ?

Hindu Undivided Family (HUF):-  Is a family with husband, wife and children (and children’s spouses if any) living together. The property owned by this family will be through lineal ascendants or any ancestors. There are a set of laws that govern property ownership, marriages, taxation etc for a legally declared HUF. IT department of India has a format of taxation for a HUF; tax benefits can be availed from this format

Advantages

  • Tax benefits by forming an HUF
  • Every member of the family can deposit their income in the common corpus.
  • Single person’s ( Karta ) authority while participation from entire family

Hindu Undivided Family Account Opening Required Documents

  • Latest color photograph of Karta signed across the photograph 
  •  Copy of PAN Card of HUF and Karta 
  •  Proof of address of Karta 
  •  Bank proof of HUF: Copy of a cancelled cheque leaf with client name, account number and bank address printed on it. If any of these details is not printed on cheque, then provide a latest bank statement with Client name, address, account number and bank address printed 
  •  Copy of Financial Details, Bank Passbook/Bank Statement of HUF indicating its existence.
  • Declaration to be given by Karta 

useful link

http://www.jagoinvestor.com/2011/10/huf-creation-and-saving-tax.html

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#16

HUF stands for Hindu Undivided Family. In an HUF trading account, karta/ family head acts as the decision maker on the family’s behalf.

Documents required- 1. PAN copy of HUF and karta,

  1. Declaration form from all members of karta to declare- a. They are only members of HUF, b. Karta has sole authority over HUF c. Residential proof of Karta d. Identification proof of Karta.

Benefits of HUF Account: Tax deduction can be availed under 80C, 88, 80L

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#17

A Hindu Joint Family or Hindu united family (HUF) or a Joint Hindu Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent, consisting of many generations living under the same roof.

HUF is a separate entity in itself and qualifies for all tax benefits under Section 80C (up to Rs 1 lakh), 80D (health insurance premium), 80G (donation), 80L (income from bank account), Section 54 (capital gains) and so on.

Documents required

• PAN Card copy of the HUF

• Bank Passbook/Bank Statement of HUF indicating its existence

• PAN Card copy & Address Proof of Karta

• Declaration to be given by Karta & all major co parceners of the HUF.

• HUF Declaration(for Demat account)

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#18

HUF : Hindu Undivided family.

In India there are families living together as a tradition/since ages.

The senior most male member of the family is considered to be the head of the family or Manager of the family. All of the members may earn but the fund goes to one account(HUF).

The  benefit in having such an account is the Taxation(Slabs). It is much lesser when compared to individual accounts.

Documents or opening a H.U.F ACCOUNT

  • Duly filled Trading/Trading & Demat/Commodity form with photograph of Karta affixed and signed across.[(T),(T+D),(C)]
  • PAN Card copy of the HUF.[(T),(T+D),(C)]
  • Bank Passbook/Bank Statement of HUF indicating its existence.[(T),(T+D),(C)]
  • PAN Card copy & Address Proof of Karta.[(T),(T+D),(C)]
  • Declaration to be given by Karta & all major co parceners of the HUF – Annexure 1C (For Equity Account) andAnnexure 2C (For Commodity Account). [(T),(T+D),(C)]
  • HUF Declaration for Demat account.[(T+D)]

Account opening cheque favoring “Zerodha” for

  1. Rs. 300  - If only Trading Account (Rs.200 each, if you’ve printed the forms on your own)
  2. Rs. 300  - If only Commodity Account (Rs.200 each, if you’ve printed the forms on your own)
  3.  Rs.800 – If Trading+Demat Account (Rs.700 if you’ve printed the forms on your own). This charge includes advance AMC for Demat Account for 6 months.
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#19

Hindu Undivided Family (HUF) is a family as per the Hindu Law, which consists of common ancestor, including wives and unmarried daughters.

The main advantage of opening Trading and Demat A/c under HUF is for tax savings.

The documents required for opening Trading and Demat A/c under HUF are:

1.  PAN card photocopy of HUF.

2.  Deed of declaration of HUF/list of coparceners.

3.  Bank passbook or bank statement in the name of HUF.

4.  Photograph, identity proof, address proof.

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#20

Hindu Undivided Family- This is scheme is mainly utilized for tax benefits. Documents required for opening HUF are:

PAN card photocopy of HUF.

PAN Card copy & Address Proof of Karta.

Copy of Financial Details, Bank Passbook/Bank Statement of HUF indicating its existence.

Declaration to be given by Karta 

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