Hindu Undivided Family (HUF) Registration

Hindu Undivided Family

Hindu Undivided Families are the form of organizations that has separate legal entity for tax assessment. The Hindu Undivided Family (HUF) Registration has been defined under Hindu law as a family, which consists of males lineally descended from a common ancestor and included their wives and unmarried daughters.

Simple Steps for HUF Creations!
Creating HUF is the best way to save taxes by an assessee. Forming a HUF does not involve huge legal or procedural formalities to be followed. Forming HUF can help you save taxes to an extent.

Select a suitable name, Capital

  • For a HUF to be created the major requirements are capital and persons. Capital can be in the form of property, assets gifted by relatives and friends, or received by the HUF through a will. The HUF to be created should have a proper name. The members can choose a suitable name before starting a HUF business form.

Form a Deed

  • Formation of HUF should be embodied in a deed that provides that a proper legal deed or agreement is required before creating a HUF. The agreement should be between Karta & other family members. The agreement/ deed should have all the details, including the name of Karta, co-parceners, address & source of funds in the corpus.

Apply for PAN

  • After executing the deed, the Karta is required to obtain a permanent account number PAN for the HUF. Obtaining PAN is a mandatory requirement as all financial transactions shall carry PAN. The minimum no. of members required is two who can be a husband and wife. Both spouses can create a family and constitute a HUF.

Open a Bank Account

  • After that, the Karta is required to open a bank a/c in the name of the HUF. The HUF is now ready to function. The Karta will have to invest in tax-saving instruments and file tax returns on behalf of the HUF. Only the money related to the business of HUF shall be invested in such Bank accounts.

To know about Partnership Company Registration click on this link