Tax Unbound

Hindu Undivided Family (HUF) Deed

What it means?

A Hindu Undivided Family (HUF) is an extended family arrangement prevalent among Hindus of the Indian subcontinent, consisting of many generations living under the same roof. HUF is ancient form of commerce, business works around a tradition routed in hierarchy. The male (and now even female) members of biological family run a business together & hand it down from generation to generation. They do business under the control of the head of the family known as “karta”. The members of the family is known as “Co-parceners” of Hindu undivided estate.  

Formation of A HUF should be embodied in a deed which provides that a proper legal deed or agreements are required before creating a HUF. The agreement / deed should have all the details, including the name of Karta, co-parceners, address and source of funds in the corpus. Deed will facilitate that the business or the formation of HUF is valid and true.

HUF Joint Family

Service Price options:

Beginner

From ₹4,990

✅ Drafting of HUD Deed

✅ PAN Application

✅ Notary of Declaration (Extra Rs 500 + courier charges as applicable) 

✅ 2-5 Days Delivery time for HUF Deed. Average processing time for PAN/TAN is 2-5 days. 

Standard

From ₹6,790

✅ Drafting of HUD Deed

✅ PAN Application

✅ Notary of Declaration (Extra Rs 500 + courier charges as applicable) 

GST Registration

✅ 2-5 Days Delivery time for HUF Deed. Average processing time for PAN/TAN is 2-5 days. Average processing time for GST is 1-2 weeks. 

All inclusive

From ₹7,990

✅ Drafting of HUD Deed

✅ PAN Application

✅ Notary of Declaration (Extra Rs 500 + courier charges as applicable) 

GST Registration

MSME Registration

✅ 2-5 Days Delivery time for HUF Deed. Average processing time for PAN/TAN is 2-5 days. Average processing time for GST is 1-2 weeks and for MSME is 3-4 days.

Preliminary Documents Checklist

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Photographs, PAN & AADHAR Card of all Members
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ID Proof

(Driving License/Passport/Voter ID)

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Address Proof

Electricity Bill or any other utility bill for the address proof

Document Checklist Image for Company Incorporation
Sole Proprietorship process brief

Process Brief

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Verification of Documents as per Checklist
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Drafting of HUD Deed
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Notary of Declaration
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Obtain PAN / TAN

Key Features

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Tax Incidence can be lowered

By considering effective tax planning under HUF structure.

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HUF member cannot be taxed

In respect of any sum which he receives as member out of family income.

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May enjoy several Exemptions

Such as agriculture income, dividend income etc. which could be planned for the each of family member & also for the HUF to secure high level of zero income tax for the family.

Legal Requirements for Formation of A Hindu Undivided Family

Capital & Members

Capital & Members

For A HUF to be created, major requirements are the capital and persons. Capital can be in the form of ancestral property, assets gifted by relatives and friends, or received by the HUF through a will. The minimum no. of members required is two, who can be a husband and wife. Both the spouse can create a family and constitute a HUF.

select family name

select a name

A HUF to be created should have proper name. Select a proper name for the HUF and the name should not violate the laws or have any negative impact. The members can choose a suitable name before starting a HUF business form.

Form a deed

Formation of A HUF should be embodied in a deed which provides that a proper legal deed or agreements are required before creating a HUF. The agreement / deed should have all the details, including the name of Karta, co-parceners, address and source of funds in the corpus. Deed will facilitate that the business or the formation of HUF is valid and true.

Apply for a PAN

Application for PAN (Permanent Account Number) is also an important step to be undertaken while forming a HUF. 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.

open a bank account

After PAN has been allotted, 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.

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The liability of the KARTA is unlimited because he is the only deciding authority, whereas the liability of CO-PARCENERS is limited up to their share in the capital of the family.

According to Hindu Succession Act, 1956, all the members of Hindu Undivided family have equal rights to share the profits as well as losses of the business.

The control of the family lies with the Karta. He takes all the decision and authorize to manage the business.

If KARTA dies and become incapable of managing the business then the succeeding CO-PARCENERS will act as KARTA.

The inclusion of an individual into the business occurs due to birth in a Hindu Undivided family.

Yes, if a child is adopted, then he also becomes a member of the HUF.

Yes, upon marriage, a wife becomes a member of her husband’s joint family.

There is a great deal of business secrecy in the organization.

The business secrets are known to the CO-PARCENERS in general and KARTA in particular.

It is not obligatory for them to publish their accounts, which results in great deal of privacy and secrecy.

Yes. As so long as the property which was originally of the joint Hindu family remains in the hands of the widows of the member of the family and is not divided, HUF can continue with female members.

Gift by Karta of HUF, a movable property or an immovable property within reasonable limits in favor of his daughter is permissible on the occasion of her marriage.

All members; A son in the womb of his mother at the time of partition; Mother;
Wife.