HUF is a distinct legal entity and can own property in its name.
2)in TDS payment should be done in PAN of HUF
My name required explicitly in sale agreement even though I am karta of HUF?
Hi, I recently formed the HUF and right now it has no source of income (other than gifts from members). - I want to purchase a property in the name of HUF (as this is the only way I can build corpus for it, given there are no ancestral properties and due to clubbing I cannot simply transfer my existing house to HUF either). - I am the Karta, and I am capable of getting the home loan. Thus, below queries: 1] In sale agreement/sale deed, simply having HUF name will suffice? Or I have to specify my name along with HUF name explicitly to ensure I get home loan? 2] In TDS payments, should that be done in the PAN of Karta or in the PAN of HUF (as Home Loan will be availed by Karta)
Asked 1 year ago in Property Law
Religion: Hindu
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7 Answers
Dear Client,
When you are purchasing the property in the name of a Hindu Undivided Family (HUF) under the Hindu Succession Act, 1956, the sale deed must mention the name of the HUF with the name of the Karta that is your name. Including your name along with the HUF's name is important for obtaining the home loan, as lenders require the Karta's name to assess eligibility. And according to Section 194-IA of the Income Tax Act, 1961, the TDS should be deducted and deposited using the PAN card of the HUF as the property is being purchased in the name of HUF, regardless of the Karta availing the loan.
Thank you.Hope this answers your query.
1. The property should be purchased in the name of the HUF only and the Kart's name as a karta of the HUF can be added in the sale deed.
2. Since the property is on the name of the HUF and karta is just a manager or administrator, the PAN and other related documents may have to be on the name of the HUF.
Thanks for the quick replies, follow up on 1st one: Can you also guide me on how exactly to write the names in the sale agreement/deed, I mean what is the right way to draft from below 4 options: 1) there is only one purchaser i.e. "ABC (HUF)" OR 2) there is only one purchaser i.e. "ABC (HUF) consisting of Mr M as (Karta) and Mrs N as (Member)" OR 3) there are 2 purchasers i.e. "ABC (HUF)" & "M (Karta)" OR 4) there are 2 purchasers i.e. "ABC (HUF) consisting of Mr M as (Karta) and Mrs N as (Member)" & "Mr. M"?
Asked 1 year ago
MR. ————(Aadhar No ) age about —— as karta of HUF
A HUF is considered as a separate legal entity in the eyes of law and the Karta is the head of the Hindu Undivided Family (HUF) and is the senior-most male member. The Karta has the authority to manage the family and its property, including making decisions on property disposal if needed.
Therefore the Karta can purchase the property on behalf of HUF as a representative of HUF, he can add his name to sale deed and mention himself as Karta to HUF in the sale deed.
- As per law, the Karta of HUF must either be an applicant or co-applicant for a home loan.
- Further the HUF should be in existence for at least three years.
- Further, the HUF should provide their IT returns for the last three years.
1. Since, you want to purchase the property in the name of HUF , then you can specify your name as Karta with the HUF name.
2. PAN of HUF
The option No. 2 is correct.
Dear Client,
To purchase property in the name of your Hindu Undivided Family (HUF), the sale agreement/deed should be drafted as follows: "ABC (HUF) that includes Mr. M as (Karta) together with Mrs. N as (Member)." This decision unequivocally recognizes the HUF as the buyer, while noting the Karta along with a member, which truly reflects the HUF construct. Being the Karta, you manage the affairs of HUF, such as property acquisitions, yet all significant decisions involve the consultation of all adult members. Applicable statutes contain the Hindu Succession Act, 1956, which defines rights pertaining to ancestral property, the Hindu Adoptions and Maintenance Act, 1956 and the Income Tax Act, 1961, offering tax breaks for HUFs. You must seek the advice of a legal expert to remain in compliance with all the valid laws.
Hope you find this answer satisfactory.