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HUF (Hindu Undivided Family) PAN & TAX Doubts

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S

Satish

TF Premier
Hi All,

Recently I came to know about HUF taxation. I'm planning to apply HUF PAN. Can someone please clarify below doubts?
1. What would be HUF incorporation date? Is it marriage date or birth date of child? FYI - I've twins daughter.
2. Do I need any cheque from mother to apply HUF PAN? One of the CA asked me to provide cheque of Rs. 20,000 as gift from my mother. FYI - My father passed away in 2006.
3. HUF Affidavit - shall I get affidavit first date then apply online for HUF PAN? No date concern right?
4. I've elder brother, can I go ahead as karta?
5. Post opening HUF saving account, can my wife & me transfer our salary amount to this account and make investment like fd from this account? If yes, will this amount considered as income?

Thank you in advance!
 
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Satish said:
What would be HUF incorporation date? Is it marriage date or birth date of child? FYI - I've twins daughter.
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First of all Congrats
HUF incorporation date would be the marriage date or child birthdate (it's your choice)
Satish said:
Do I need any cheque from mother to apply HUF PAN? One of the CA asked me to provide cheque of Rs. 20,000 as gift from my mother. FYI - My father passed away in 2006.
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No you can apply HUF PAN even by yourself. It's easy process.. you don't need any cheque or anything. Just ID Proofs of Karta. The thing is your HUF can't have your mother so there's no need for her details at all.
Satish said:
HUF Affidavit - shall I get affidavit first date then apply online for HUF PAN? No date concern right?
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No there is no date concern. For applying PAN you will need affidavit. You can get format online. Basically a declaration of Karta and coparceners name, father's name and address.
Satish said:
4. I've elder brother, can I go ahead as karta?
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You can have your HUF with you, wife and children. Your brother can have his own huf, basically any married person can have an HUF seperately. Your HUF won't have your brother as coparcener.
Satish said:
5. Post opening HUF saving account, can my wife & me transfer our salary amount to this account and make investment like fd from this account? If yes, will this amount considered as income?
Click to expand...
Better way i would suggest would be to prepare an HUF deed with mentioning everything. I am not a tax expert CA saab @its_karan would know better
 
Satish said:
Hi All,

Recently I came to know about HUF taxation. I'm planning to apply HUF PAN. Can someone please clarify below doubts?
1. What would be HUF incorporation date? Is it marriage date or birth date of child? FYI - I've twins daughter.
2. Do I need any cheque from mother to apply HUF PAN? One of the CA asked me to provide cheque of Rs. 20,000 as gift from my mother. FYI - My father passed away in 2006.
3. HUF Affidavit - shall I get affidavit first date then apply online for HUF PAN? No date concern right?
4. I've elder brother, can I go ahead as karta?
5. Post opening HUF saving account, can my wife & me transfer our salary amount to this account and make investment like fd from this account? If yes, will this amount considered as income?

Thank you in advance!
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i hold ordinary individual PAN will i get HUF PAN separately
if so how earnings are taxed?
 
HUF makes most sense when there is a potential of inheritance of property (can transfer one properly by parents to HUF) or separate source of income (like rental income, commission etc)

If anyone individual transfers funds to HUF, then it could be taxed in their hands so one has to be mindful there.

HUF is a separate taxable entity so separate PAN.
 
Pradumya said:
First of all Congrats
HUF incorporation date would be the marriage date or child birthdate (it's your choice)

No you can apply HUF PAN even by yourself. It's easy process.. you don't need any cheque or anything. Just ID Proofs of Karta. The thing is your HUF can't have your mother so there's no need for her details at all.

No there is no date concern. For applying PAN you will need affidavit. You can get format online. Basically a declaration of Karta and coparceners name, father's name and address.

You can have your HUF with you, wife and children. Your brother can have his own huf, basically any married person can have an HUF seperately. Your HUF won't have your brother as coparcener.

Better way i would suggest would be to prepare an HUF deed with mentioning everything. I am not a tax expert CA saab @its_karan would know better
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Thank you so much
 
The salaries given by husband and wife would basically be a gift to the HUF. Any income deriving out of using that money will actually be income of the husband or wife as far as I know. If you have some sort of income other than salary such as commission, brokerage, freelancing income; you could probably add it in the HUF. And then any interest / income generated from that amount would be the income of the HUF.
 
Samarth343 said:
The salaries given by husband and wife would basically be a gift to the HUF. Any income deriving out of using that money will actually be income of the husband or wife as far as I know. If you have some sort of income other than salary such as commission, brokerage, freelancing income; you could probably add it in the HUF. And then any interest / income generated from that amount would be the income of the HUF.
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Amount transferred by me & my wife to HUF would considered as income. Interest earned from this amount would be considered income for me or my wife? Did I understand correctly?
 
Satish said:
Amount transferred by me & my wife to HUF would considered as income. Interest earned from this amount would be considered income for me or my wife? Did I understand correctly?
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No
You and your wife earn and pay tax on whatever you earn. Then transfer the amount to HUF bank. No issues here. As long as the amount is coming thru a person who is a coparcener of HUF & has paid taxes on transferred amount.
If you invest using huf account or earn bank interest or any third party income (rent, dividend etc.) this all will be taxed to HUF PAN.


Example - if you receive rent in your account and then transfer to HUF then tax liability arises on your pan. If you directly receive rent in HUF bank account then tax liability arises for huf pan.

Hope this clears your doubts.
 
Pradumya said:
No
You and your wife earn and pay tax on whatever you earn. Then transfer the amount to HUF bank. No issues here. As long as the amount is coming thru a person who is a coparcener of HUF & has paid taxes on transferred amount.
If you invest using huf account or earn bank interest or any third party income (rent, dividend etc.) this all will be taxed to HUF PAN.


Example - if you receive rent in your account and then transfer to HUF then tax liability arises on your pan. If you directly receive rent in HUF bank account then tax liability arises for huf pan.

Hope this clears your doubts.
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Thank you so much. It is clear now.
 
Pradumya said:
No
You and your wife earn and pay tax on whatever you earn. Then transfer the amount to HUF bank. No issues here. As long as the amount is coming thru a person who is a coparcener of HUF & has paid taxes on transferred amount.
If you invest using huf account or earn bank interest or any third party income (rent, dividend etc.) this all will be taxed to HUF PAN.


Example - if you receive rent in your account and then transfer to HUF then tax liability arises on your pan. If you directly receive rent in HUF bank account then tax liability arises for huf pan.

Hope this clears your doubts.
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However, what happens if the flat is in the name of only the husband?
 
I tried to google but cannot find a good guide to explain pro and cons for HUF, also the limitations for members and other such information. Would be good if someone can share such similar document.
 
Pradumya said:
No
You and your wife earn and pay tax on whatever you earn. Then transfer the amount to HUF bank. No issues here. As long as the amount is coming thru a person who is a coparcener of HUF & has paid taxes on transferred amount.
If you invest using huf account or earn bank interest or any third party income (rent, dividend etc.) this all will be taxed to HUF PAN.


Example - if you receive rent in your account and then transfer to HUF then tax liability arises on your pan. If you directly receive rent in HUF bank account then tax liability arises for huf pan.

Hope this clears your doubts.
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If a coparcener gives money to HUF and HUF earns form it , there is clubbing provision under section 64 so that income is of Husband or wife not HUF
 
manikwalia said:
If a coparcener gives money to HUF and HUF earns form it , there is clubbing provision under section 64 so that income is of Husband or wife not HUF
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If any member transfers any assets as a gift then the income generated would be taxed to HUF.
Yeah if you intend to transfer the asset to get it back after time period then clubbing provisions would apply.
Am i right? @its_karan
 
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