1. Presented by:
Shankar Bose
Inspector of Income-tax
MSTU, Puri

2.  Not defined in the Act but mentioned in the
list of “persons” under Sec.2(31).
 As per Hindu Law, HUF is a family which
consists all persons lineally descendant
from a common ancestor and includes their
wives and unmarried daughters.
 Mainly Applicable to Mitakshara school.
 It is all about undivided share in inherited
property.

3.  Income of HUF will be assessed if the
following conditions are fulfilled :-
 There is a Coparcenership.
And
 There is Joint-Hindu-Family which yields
income

4.  All persons of HUF are called members.
 Male members are called coparceners.
 The coparceners acquire, by birth, a right
in the joint family property.
 They have the right to enforce partition.
 Female members have no such right.
 They are entitled to maintenance out of
the family property.

5.  The successor in Mitakshra has to share
the right to inherited property with others
 The successor in Dayabhaga has
absolute ownership on inherited property.

6.  HUF comes into existence whenever--
 Inheritance from paternal ascendants takes
place
 No of Coparcener is more than one
 In case of non testamentary death where one has
self acquired property HUF will take over
 Once HUF is in place, it almost becomes
perpetual.

7.  The Concept of coparcener
 Right to inherited property while still in mother’s
womb irrespective of gender.
 The share of coparcener is variable.
 Inheritance from 3 generation of lineal paternal
ascendants (Apratibandh Daya).
 No rights on inheritance from others
(Sapratibandha Daya)
 The senior most male member will usually be the
Karta.

8.  Upon Karta’s / Copercener’s death his
share will devolve upon his widow and
mother. He cannot give his share to
anybody through will.
 No rights to ascendant’s self acquired
property or ascendant’s inherited
property from other sources.

9.  On such Properties the concerned person
will have absolute right and can make
testamentary disposition.
 One person may be coparcener / karta of
more than one HUF.
 If development of HUF property is made
by any coparcener then such income will
be proportionately charged.

10.  HUF can come into existence even
without inherited property.
 Individual property may be transferred to
common stock.
 Section 64(2) will be attracted in all the cases
 HUF will be assessed just as
Individual, though some of the
deductions under chapter VIA will not be
available.

11.  Any property received through
inheritance but not through the paternal
ascendants will not come into the
common stock. The recipient is absolute
owner of such property.
 If this property is shown in the common
stock then sec 64(2) will be attracted.
 Coparceners have no liability till partition.

12. I
N
H
E
R
I
T
E
D
Paternal
Ascendants
Clubbing
u/s 64(2)
Direct Transfer of Self
Acquired Property
Direct Tr. of Inherited
Property (diff. source)
Taking a circuitous route

13.  Partial Partition is no more recognised.
 On total partition
 A.O. to cause Inquiry
 Separate assessment for broken period.
 Members are jointly and severally responsible
for tax in arrears in post partition stage.
 However the joint liability is limited to the share
of property received on partition. (Sec 171).

14.  Income assessed in the hands of HUF
cannot be assessed in the hands of
individual. {Sec. 10(2)}
 Karta of HUF can be prosecuted unless
he can prove that offence was committed
without his knowledge.
 The other coparceners can also be
prosecuted if his complicity is proved.

15.  Total income of HUF is to be computed
as per general rules:
 Compute head-wise income excluding
exempted incomes.
 Allow deductions under Chapter-VIA.
 Calculate tax payable, as per rates
applicable to individuals.

16. Points to be noted :
 Fund of the HUF invested in company or
firm and any fees remuneration ordinarily
received by any member from the company
or firm will be Income of HUF unless it is
derived by the member in his individual
capacity.
 Any income arising out of property
converted by the individual u/s.64(2) to the
common stock of HUF will not be included
in HUF’s income. It will be the member’s
individual income.

17.  Points to be noted :
 Stridhan is the absolute property of
woman. Any income arising out of
Stridhan will not be includible in HUF’s
income.
 Under the Dayabhaga system any
income arising out of the property to the
father will be his personal income unless
he has a brother to own such property
jointly and to form coparcenary.

18. However, in case of House Property jointly
owned by co-owners, where each owner’s
share is definite and ascertainable, house
property income will be computed as per
Sec. 26.
Share of income from HUF received by
any member will be exempted in his hand
u/s.10(2).