HUF and related property queries
I am a male and fall under 30% income tax bracket. I’ve 2 minor daughters, a wife and mother who stay with me as my family. I’ve a married sister living in a separate city. I inherited an HUF (and I’m the Karta of that HUF) that my father would likely have created back in 2004 or 2005 (I do not know when exactly due to my father’s untimely demise in 2011 and I could not find an HUF deed in his documents). I do an HUF PAN card (which has HUF date of birth as 1/1/1900) and we’ve been filing IT returns for that HUF probably since 2004-2005. As I understand, there was some agricultural land that my father had sold back in 2004-2005 and its sale proceeds came into a linked HUF bank account which was separately opened around that time. Thereafter, my father bought a flat with that money in 2006 which was subsequently sold in 2013 and I bought another property in a different city by investing some more into it. I am currently holding that property (possession taken in 2019 and I’ve an agreement to sale and construct in HUF’s name) but the property isn’t registered yet.
I’ve the following questions pertaining to this HUF and the only property that I have as part it –
1. Who all are considered as a part of this HUF? Would it be my sister, mother, wife and 2 daughters? Or my sister is not considered a part of this HUF post her marriage? Another point to note is that this HUF likely came into after my sister got married in year 2000 but I do not have a way to confirm in the absence of an HUF deed.
2. Is there a good reason to dissolve this HUF now before registration this property or the HUF benefits (separate PAN, income tax assessment/benefits etc.) outweigh any risks or overheads (maintainability, selling the property with coparceners agreement etc.) long term?
3. When I register this property, what is the right legal name I should use to register it:
a. the HUF itself <father’s name> followed by word “HUF” – e.g. Anil Kumar HUF
b. or should it be registered in <my name>? – e.g. Ram Kumar
c. Or should it registered in <my name> followed by word “Karta” to signify explicitly that this is an HUF property – e.g. Ram Kumar Karta
d. Any other name?
4. After my demise, who would become the acting Karta of this HUF?
5. After my demise, who all would be the legal owners of this property? Going back to question #1, would all coparceners need to mutually partition, agree and sign before this property can be sold?
6. Similarly, after my wife’s demise, who would become the action Karta of this HUF? Would it be the elder daughter?
7. Would my daughter’s spouses have any legal ownership in the HUF or the said property?
8. What potential compilations HUF coparceners could go through to maintain this HUF – especially after my or my wife’s demise? Considering that, what would be a good time to dissolve this HUF?
9. Could an HUF be dissolved with property ownership defined through a “declaration” as part of my WILL?
Asked 2 years ago in Property Law
Religion: Hindu
Thank you, Sir. Some follow up questions:
1. Just to confirm, the property should be registered in my name (i.e. Karta) followed by HUF word. E.g. "Ram Kumar HUF"?
2. Is it recommended to have any or all of the co-parceners' names to be included in the sale deed as part of the registration or that's not required?
3. Wouldn't my mother also be a coparcener? When you say my wife is a member of HUF (given she's part of my family) but not a coparcener, what sort of limited rights does She have?
4. Is it that only blood relations can be coparceners or Karta's (e.g. eldest son or daughter) but the rest of the family is simply a member with limited rights?
5. In the event of my death, would my daughter (even if minor) become the Karta automatically while my younger daughter, sister, and mother would remain coparceners?
6. Would you recommend creating a HUF deed (given it doesn't exist as of today, at least I am not aware) before registering the sole property under it or it's not mandatory/required?
7. Would an advocate be able to help with deed creation? Can I take your help or online help from kaanoon.com for example?
8. Given I'm under a 30% tax bracket, is it good to retain HUF to have from the tax-saving perspective or any legal complications regarding property inheritance later (e.g. agreement and creation of partition deed) is not worth the hassle? Any recommendations to make that process smoother? E.g. some sort of an agreement/affidavit which is well documented and understood by all HUF members etc.?
9. Is there any good HUF documentation you can point me to that is a reliable source for learning?
Asked 2 years ago
