HUF stands for Hindu Undivided Family wherein the Income that is being earned belongs to the whole family and not to any specific individual. As the Income is being generated in the hands of the whole family, this income cannot be taxed in the hands of the family but is taxed in the hands of the HUF. And, therefore HUF is considered as a separate entity for the purpose of Income Tax Act and the HUF has a separate PAN Card and a separate income tax return is filed for the same.

Members of HUF:

As HUF stands for Hindu Undivided Family, individuals belonging to other religions are not allowed to form HUF’s except Jain and Sikh who can create HUF even though they are not governed by the Hindu Law.

An HUF consists of:

Karta: Karta is generally the father of the family who has the right to do all the things for the family and takes all the decisions on the behalf of the family.

Co-Parceners: 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. Not all members of the HUF are its coparceners. The co-parcenery extends to four degrees down the family hierarchy in the following manner: 

1st degree: Holder of ancestral property for the first time.

2nd degree: Sons and daughters

3rd degree: Grandsons.

4th degree: Great grandsons.

HUF Registration Process:

• Create an HUF Deed
• After that apply for TAN and PAN (Permanent Account Number)
• Needs to open a Bank Account for the all the business transaction

List of Documents Required for HUF Registration:

1. Permanent Account Number (PAN) Card
2. ID Proof (Driving License/Passport/Voter ID)
3. Electricity Bill or any other utility bill for the address proof