Majority of the population in India belongs to the Hindu community. Hinduism, being an ancient religion has several old customs and traditions as well as rituals which are being followed by its members even in present times. The joint family system, where members of one family lived together under one common roof, including married brothers, their children and grandchildren, sometimes even extending to five generations, continues even today in most Hindu families. Under the joint family system, the members share houses, properties, business, income, wealth, food and their value systems and principles. Therefore, in India, a joint Hindu family is given a separate legal entity status called ‘Hindu Undivided Family’ (HUF) and this status is shared and enjoyed by all members of the family.
Benefits: Tax savings through HUF
HUF is a good tax saving tool as it is regarded as a separate legal entity under the tax law and also assessed to tax separately as a distinct legal person. This implies that a person can file two income tax returns, one in his personal individual capacity and one in the name of his HUF. This gives the benefits of dividing his taxable income between two entities and hence, he can claim double deductions and expenses in both capacities, thereby reducing his total taxable income and tax liability substantially. For e.g. at present, the tax free income in India is Rs. 200,000 per annum. An individual can thus claim a minimum of Rs. 400,000 as total exempt tax free income, (Rs. 200,000 in his personal and an equal amount in his HUF return).
• Duly filled HUF Trading & Demat form with photograph of Karta affixed and signed across.
• PAN Card copy of the HUF.
• Bank Passbook/Bank Statement of HUF indicating its existence
• PAN Card copy & Address Proof of Karta.[(T+D)]
• Declaration to be given by Karta & all major co-partners of the HUF – Annexure 1C (For Equity Account)
• HUF Declaration is required
• Applicant original self-attested with HUF Seal clear ‘PAN Card (HUF)’ copy required in A4 size paper
• Applicant original self-attested with HUF Seal latest Bank Statement with 3 months transactions (with contains Account Holder Name, Account Number, Holder Address, Bank Logo or Original Bank Seal, Bank Official Signature) required for Address and MICR Proof.
• Applicant original self-attested without HUF Seal clear ‘PAN Card (Individual)' copy required in A4 size paper.
• Applicant original self-attested clear ‘Address Proof’ copy required in A4 size paper.
Karta should sign the Account Opening Form and other documents under the stamp of HUF.
All KYC documents to be attested by the Karta.