HUF- Hindu undivided family comes under the Hindu Act. The nation being Hindustan, a special privilege is given to Hindus under Income Tax Act to have a separate file to consolidate the income of the family and pay tax accordingly. A Sikh, Jain, Buddhist etc are also part of Hindu and therefore they also enjoy the privilege like other core Hindus.
Obviously this is not allowed to Christians or Mohammedans (Muslims). The male head of the family is called the Kartha of the family and other male members are the co parceners irrespective of their age who may be the son; grandson, great grand son while the females are the members of the family. A Kartha is accountable and it is his responsibility to pool all the income of the family and pay tax and file the return of income of the family.
The individual member, either male or female who receives income in their individual capacity is nothing to do with the income of the family and gets assessed separately and the individual income does not form part of the HUF income. HUF properties are those which are acquired from the ancestors and all of them who are part of family have collective right, and by the corpus of the HUF they can carry on business or build on their property, acquire property, sell ancestral property and derive capital gains all those are assessed under the banner of HUF and separately taxed and the basic limit prescribed for any individuals will apply for HUF also. The normal rates as applicable to individual assessee shall apply for HUFs also.
Many Hindus are not aware of the privilege they have as a Hindu and in due course of time it merges into the individual income and thereby lose the benefit which they could have got by analyzing and segregating the income. There were too many occasions and the courts have dealt the subject in detail in many cases and as per the Hindu Law, they are in favour of separating the income even if it had mixed up earlier and assessed in the hands of Individual i.e. in the name of kartha.
What is required is that, the family should exist, Kartha should be established, there must be some nucleus of the family, and they belong to Hindu religion. When such basic requirements exist then a HUF could be established any time and corrective measures could be taken for the future.
As said, they have collective right over the assets and liabilities of the family. As per the Hindu Act there are two types of families, Mithakshara and Dayabagha. The individual rights as the member of the family depends on which type of school is followed by the family from the beginning. All the male members have equal rights over the properties and the females have right to the extent of maintenance and marriage. The male member can ask for the partition of the HUF assets and the female can not claim for the partition, but when assets are partitioned they have their right over their part of the amount for the maintenance and if they are unmarried, a amount that could be required for the purpose of the marriage. All the co parceners have equal right over the property and also the liability if any, on the family.
Before 1972, partial partition was recognized but from 1/4/1972 only full and final partition among all the co parceners is only recognized, on partition the divided portion falls on smaller HUF and only if there is no family then it will be assessed in individual capacity till he gets a family.
Such of those families who do not have a nucleus and common hotch pot is empty; it can be created by way of gift from the well-wishers of the family, which existed. Such gift should be very clear for the family’s perpetual succession.
There is no scope of making a will on HUF property as the Hindu Act comes into operation and the rights of male and females are well established. However he/she can make a will to the extent of his/her share.
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