dissolution of HUF can be done by entering into deed of partition for division of properties by metes and bounds

2) it should be duly stamped and registered

3) In the case of total or complete partition, the Hindu Undivided Family ceases to exist as such and therefore, where there is a proper claim for partition and where the same is accepted by the AO, the Hindu Undivided Family ceases to be assessed as an HUF after the date of total partition.

4) where a genuine complete partition takes place and some property is divided among the persons entitled to the share on partition, the income from the partitioned assets is liable to be assessed in the hands of the smaller branches of the HUF formed by the coparceners of a bigger Hindu Undivided Family

5) you can enter into memorandum of family arrangement recording the partition nut AO has to be satisfied that partition has taken place

1)The Karta has the power to enter into any agreement or contract on behalf of the family and such contracts/agreements ar binding on the HUF

2) HUF needs to be referred to in the lease agreement

1) Where, at the time of making an assessment it is claimed by or on behalf of any member of a Hindu Undivided Family that a total partition has taken place amongst the members of such family, the AO shall make an inquiry thereon after giving notice of the inquiry to all the members of the family.

(2) On the completion of the inquiry, the AO shall record a finding as to whether there has been a total partition of the joint family property, and if there has been such a partition, the date on which it has taken place.

3) if you have entered into registered deed of partition then IO should be convinced that actual partition has taken place

Partition is a process by which a joint enjoyment is transformed into an enjoyment in severally. Each one of sharers had an antecedent title and therefore no conveyance is required.

Once shares of each sharer are defined, the partition is complete. It is not necessary that it should be by metes and bounds.

Although mere severance of the status of the family may tantamount to partition under the Hindu law of Joint family, the requirement of the Income-tax Act is a little more. A partition to be recognised under the Act must lead to physical division of the joint properties. If the properties belonging to a HUF are not partitioned at all by dividing them among the members, even though capable of division, then the members of the family cannot say that so far as those properties are concerned they stand divided.

1. Method of dissolution without paying duties: Is a family settlement/agreement or memorandum needed?

Dissolution of HUF occurs when partition of HUF’s property is done.Partition of HUF can be done at any time i.e. either on Survival of Karta or on death of Karta.

2. Whether HUF property that is inherited by me becomes part of my individual HUF?

No it will become yor individual property and it depends tht i you want to include it to your own HUF, there is no compulsion on you for this.

3. Can property in my HUF (movable as well as immovable) be held in the name of Karta (myself) jointly with my wife or must be in the name of the HUF?ie in the name of XYZ HUF?

Your own HUF is different to this position. The properties in yor own HUF shall remain in the name of HUF and you being a kart to it.

4. Any other aspects or precautions to be considered to deal with I Tax and other queries.

The HUF properties has various concessions under income tax act, you may consult your auditor for this.

We wish to give out on lease the flat owned by the HUF. The flat is in the name of the karta. The lease income will be deposited in the bank account of the HUF and offered to tax in the HUF's returns.

Can the lease agreement be signed by the karta on behalf of the HUF? Does the HUF need to be referred to in the lease agreement? Or can it be just between the lessee and the karta?

The lease agreement can be entered into between the karta and the lessee.

Once the agreement is between the kart and the lessee then automatically the name of the HUF shall be present in it.

Once a HUF is dissolved, and property is divided, how are the I Tax authorities to be informed? The on-line filing does not give any scope for attaching extra documents.

Once the HUF is dissolved and the properties and assets are partitioned as per the terms , your auditor will file a return mentioning that the HUF has been dissolved an the properties divided to the members of the HUF.

After that you can include in your own ITR about all such wealth and properties acquired.

What is required to convince a AO that complete partition has taken place? is it enough that the property is divided and ownership transferred in the names of the family members as per family settlement?

The copy of the registered partition deed along with the schedule of proprieties described properly in it shall be sufficient to prove your properties acquired through such partition before the AO.