About Hindu Undivided Family Act
Hindu Undivided Family – In Ancient India, there was a system called ‘Dayabhaga System’ in which the father had all the powers of joint family property as well as he had the executive power and no member of the family could enforce their will to divide the property or to claim his/her share as long as the father was alive.
But a new law ‘MITAKSHARA LAW’ is a different system as the property can be divided in the life tenure of the father.
The ‘Dayabhaga System’ is prevalent in West Bengal and the seven northeastern states of the country. Rest of the country is governed by ‘Mitakshara law’.
The Government of India has amended these laws and superseded them with one unified law called the ‘HINDU UNDIVDED FAMILY’ law or ‘HINDU Succession Act 1956’.
The Amendments
Moreover government has brought in some changes in this law on 9th September, 2005. The amendments are as follows.
1- The daughter could also be a coparcener like the sons of the HUF.
2- She also continues to be a coparcener after her marriage inspite of also being a member of HUF of her husband.
3- Coparcener is the person who has the right to demand the share of the property of family if he/she wants to part away with the family with his/her share.
4- The degree of the coparcener is limited to four degree and not all the members of the family are coparcener which is as follows.
– First time holder of the property
– Sons & Daughter
– Grandsons
– Great Grandsons
5- For creating the HUF one need to get married, as soon as one take seven circles (SAATH PHERE) the HUF created. There is no need to have child or children for creating the HUF.
6- No unmarried man can create a HUF. One should marry first to create HUF. The Hindu is always a member of HUF as soon as he/she takes birth in his family. But to create own HUF one must marry first.
7- The KARTA which is the Hindi word means ‘DOER’ has the immense power of all the affairs of the family more than any of the coparcener. Usually the KARTA is the father of the family who has the right to do all the things for the family.
8- The female could also be a KARTA as the amended HINDU Succession Act in 2005, when the father misfortunately dies and she has no brother. In that condition the daughter or the mother can be the KARTA.
9- In HUF there could be all the females’ members also when the husband dies and she has no sons.
10- The HUF can’t be a partner of the firm as the HUF is not a person whereas the KARTA of HUF can be a partner of the firm.
11- HUF can pay remuneration to the KARTA of family for the interest and expenditure to run the family business. in Jugal Kishore Baldev Sahai v. CIT 63 ITR 238 (SC), the Supreme Court held that “if a remuneration is paid to a Karta of the family under a valid agreement which is bona fide in the interest of /expedient for the business of the family and the payment is genuine and not excessive, such a remuneration must be held to be an expenditure laid out wholly and exclusively, for the purpose of the business and must be allowed as an expenditure under section 10(2)(xv)[corresponding to the present-day Section 37(1)] of the Act”.
12- Partition of HUF: Partition of HUF is also a big question. The Income Tax Law doesn’t allow to partial partition of the property of HUF. Reason is that people sometime do partial partition of the family only to bring more income tax files and to decrease their tax liability. So if a HUF is partitioned it should be fully partitioned like each and every assets as well as liability.