Who can Open – Checklist – Process – Key Words – Draft Affidavit
Who can Open/Register/Formulate the HUF
HUF can be registered/formulated by any Male Member of the Family if he has a child/children. HUF is Hindu Undivided Family, and Buddhist, Sikh, and Jain can also register HUF.
Why Should one Open a HUF
- It promotes the Joint Family Culture, which is the core of our Indian Culture
- Can build a source of Income for Children and Grand Children, without getting worried about inheritance issues after sudden demise.
- If planning to buy Property for rental income, can buy the property directly in the name of the HUF.This is hous the source of income is generated in the HUF and money also saved in the form of taxes, becasue the HUF has a slab rate of tax.
- A HUF is a different Legal Entity, thus by creating a HUF, we safeguard the funds in it from personal liabilites. e.g. if a person have liabilities in his personal name and he is unable to pay the same he could be brought to the bankruptcy and his personal properties got attached. But the properties in HUF remains intact, since it is a different legal entity.
Checklist of the documents, which all are needed for the HUF Formation:-
- PAN of the Karta
- Aadhar of the Karta
- Aadhar of the co-partner
- Stamp of HUF
Step 1: Arrange the above documents.
Step 2: Prepare the Affidavit based on the above documents.
Step 3: Now this Affidavit needed to be printed on a stamp paper of Rs. 10. This affidavit also needed to be notarized.
Step 4: Fill up a PAN Application form. Get it signed and stamped. And the Apply for PAN.
Step 5: PAN will be allotted in few days.
Step 6: After allotment of PAN, open a Bank Account.
Step 7: Now the HUF has been formulated. It is ready for working now.
Karta: Karta is the key and eldest person in HUF.
HUF is formulated on the name of Karta. For example, the name of Mr. Ram Kumar’s HUF will be “Ram Kumar (HUF)”
Co-Parcner: They are the person, who is entitled to share the income and Property of HUF. HUF belongs to its Karta and co-parcner. All have rights in HUF.
Draft Affidavit for HUF Formation
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