HUF (Hindu Undivided Family)
Till now, we have learned succession planning for individuals like you and me. But a few rules and regulations for a Hindu Undivided Family (HUF) are completely different. So, let us begin with the understanding of HUF.
The Hindu Undivided Family (HUF) concept is a kind of “Joint Hindu Family” which enjoys a separate tax status under the provisions of Section 2(31) of the Income-tax Act, 1961.
The affairs of the HUF are managed by the eldest member of the family, who is known as the Karta (manager) of the HUF.
A typical HUF consists of a Karta, wife, his sons, grandsons, great- grandsons and daughters. All members are also known as coparceners.
The daughter(s) on marriage continue to be the coparceners in her father's HUF, but are considered to be members in the husband’s HUF post-marriage.
The male members are by and large called the coparceners of the HUF.
Rights of Coparceners and members of HUF:
- Once a property is assigned to a HUF, all coparceners have an equal right to it. Even the Karta cannot transfer the property unless he gets consent from all coparceners.
- All coparceners can at any time demand partition of an ancestral property assigned to a HUF by way of distribution of HUF property among the coparceners. While each coparcener would be entitled to a share of the property, the members would be entitled to receive maintenance from the HUF.
- If a coparcener decides to separate himself from the HUF, the others being his father or brothers may continue to be coparceners to the extent of their share. In case he has a family, then he will become the head of a new joint family. If he obtains any property on partition with his father and brothers, that property will become the ancestral property of his branch.
- The interest of coparcener in property on death shall transfer by testamentary will or intestate succession and not by survivorship.
- The discrimination between son and daughter has been removed vide amendment to Section 6 of Hindu Succession Act 1956 w.e.f. September 9, 2005,i.e, unmarried daughters as well as daughters married are regarded as coparceners
They are also eligible to demand partition of an HUF, and receive equal share in the HUF property just like the sons.