Benefits of a Hindu Undivided Family (HUF)
1. Tax Efficiency
2. Property Management
3. Business Succession
4. Legal Recognition
5. Continuity
Requirements for Establishing a Hindu Undivided Family (HUF)
1. Hindu Family:* An HUF must consist of members who are part of a Hindu family, including Sikhs, Buddhists, and Jains, as per the Hindu Succession Act.
2. Common Ancestor:* There should be a common male ancestor from whom the family lineage is derived. This person is typically referred to as the "karta."
3. Creation of HUF Deed:* While not mandatory, it's advisable to create an HUF deed to establish the existence of the HUF. This deed should outline the family members, their shares, and the role of the karta.
4. Separate Bank Account:* An HUF should have a separate bank account in the name of the HUF, distinct from personal accounts.
5. Co-ownership of Property:* HUF property should be held jointly, indicating the collective ownership of family assets.
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