IndexTable of Cases IntroductionComposition of Hindu Joint FamilyOuster Of a member from the Joint familyCoparcenaryIncidents of Hindu Joint FamilyIncidents of coparcenershipRights of members of joint Hindu familyAncestral PropertyBibliography

Table of Cases Chotelal v. Jhandelal, 1972 All. 424 Gur Narain Das v. Gur Tahal Das, AIR 1952 SC 225; Vellaiyappa Chetty v. Natarajan, AIR 1931 PC 294. Isree Prasad v. Nasib Kooer, (1884) 10 Cal 1017 Kanta v. Rajah (1863) 9 M.I.A 539; Venugopala v. UOI, 1969 SC 1094 Katama Natchiar v. The Rajah of Shivagunga, 1863 MIA 539. Krishnaswami v. Rajagopala, (1895) 18 Mad 73, 83. Kumar Rasheswari Naudan v. R.B. Bhagwati Saran, 1960 S.C.J 648. Lal Bahadur v. Kanhaiyalal, (1907) 34 IA 65:29 All 244 (PC). Rajagopala v. Venkataraman,1947 P.C 122; Chandra v. Kanak, 1975 Del. 175 Ram Kumar v. Commissioner of Income Tax, 1953 All. 150 Soam v. Kunzang, 1982 Sikkim 26. Srinivasan v. Commissioner of Income Tax, AIR 1962 Mad 146. State Bank of India v. Chamandi Ram, 1969 S.C, 1330. Surjit Lal v. Commissioner of Income Tax, (1978) 101 ITR 776. Tundra v. Tiwari, 1972 M.P.L.J 400

IntroductionThe Hindu joint family is a normal condition of the Hindu society. Its origin can be traced to the ancient patriarchal system where the patriarch or the head of the family was the unquestioned ruler, laying down norms for the members of his family to follow, obeyed by everyone in his family, and having an unparallel control over their lives and properties. At the root was the general family welfare or promotion of family as a unit for which personal interests of the family members could be sacrificed. The ancient system generally treated the property acquired by the members of the family as family property or the joint property of the family with family members having one or the other right over it. With gradual transformation of the society and recognition of the members of the family as independent in their own right, concept of separate property and rules for its inheritance were developed. This dual property system, though considerably diluted, has survived the lashes of time, the judicial and legislative onslaught and the Hindu society still recognises the joint family property as unique entities having no similar concept alive anywhere else in the world.[footnoteRef:1] [1: Dr.Poonam Pradhan Saxena, Family Law Lectures, 3rd Edition(2013), Lexis Nexis, 53.]

Composition of Hindu Joint Family:A Hindu Joint Family consists of all male members descended lineally from a common male ancestor together with their mothers, wives or widows and unmarried daughters.[footnoteRef:2] An unmarried daughter on marriage ceases to be a part of her fathers joint family and joins her husbands joint family as his wife. If a daughter becomes a widow or is deserted by her husband and returns to her fathers house permanently, she again becomes member of her fathers joint family. Her children however dont become members of her fathers joint family and continues being member of their fathers joint family. Even an illegitimate son of a male descendant would be a member of his fathers joint family.[footnoteRef:3] a child in womb till it is born is not a member of the joint family for taxation purposes but is treated as in existence for certain purposes under Hindu law.4 [2: Surjit Lal v. Commissioner of Income Tax, (1978) 101 ITR 776.3 Gur Narain Das v. Gur Tahal Das, AIR 1952 SC 225; Vellaiyappa Chetty v. Natarajan, AIR 1931 PC 294.4 Srinivasan v. Commissioner of Income Tax, AIR 1962 Mad 146.5 supra 1, 54] [3: ]

To bring into existence a joint family for the first time the presence of the seniormost male member is an essential condition. However, once the joint family comes into existence it continues despite the death of this male member.The members of a joint family are bound together by the fundamental principle of sapinda-ship or family relationship, which is the essential feature of this institution. The cord that knits the members of the family is not property but the relationship with one another.[footnoteRef:4] A Hindu joint family is not a corporation.[footnoteRef:5] A Hindu joint family has no legal entity distinct and separate from that of the members who constitute it. It is not a juristic person either. Hindu joint family is a unit and in all affairs it is represented by its Karta. Within its fold no outsider, except by adoption, can be admitted by agreement or otherwise. It confers a status on its members which can be acquired only by birth in the family or by marriage to a male member. [4: ] [5: ]

Ouster Of a member from the Joint family:An unmarried daughter ceases to be a part of her fathers joint family on her marriage and may regain her status if she becomes a widow or if on being deserted by the husband comes back to her fathers house permanently. A child male or female born in the family can cease to be member of this family if he or she is given in adoption to another family by a person competent to do so under the law. The marriage of a lineal male member under the Special marriage Act,1954 to a non-Hindu will result in his automatic severance from the joint family and he cannot become a member of this family even by agreement. Presently marriages between a Hindu and a Christian can be validly solemnised under the Special Marriage Act, 1954 and under the Indian Christian Marriage Act, 1872. If they marry under the former Act, a Hindu man will cease to be a member of a joint family, there is no reason why the same consequences should not apply if they marry under the latter Act. Thus, the concept of a Hindu joint family would mean a Hindu father, having a Hindu wife and Hindu children. It is a Hindu joint family and cannot comprise non-Hindu members let alone a family having only a Hindu father, a non-Hindu wife and children whose religion cannot be determined at birth but is dependent upon the contingency of them being brought up as Hindus[footnoteRef:6]. [6: Supra 1,55]

Coparcenary:He Hindu joint family must be distinguished from Hindu coparcenary. The latter is a much narrower body than the joint family. The coparcenary includes only those persons who by birth acquire an interest in the joint or coparcenary property. They are the sons, sons sons and sons sons sons of the holder of the joint family property for the present.The essence of a coparcenary under the Mitakshara Law is unity of ownership and unity of possession. The ownership of the coparcenary property vests in the whole body of coparceners. As long as the family is joint, no individual member can predicate of the joint undivided property, that is, he has certain and definite share therein. The rights of each coparcener consists in a common possession and common enjoyment of the whole coparcenary[footnoteRef:7]. [7: MP Tandon Family Law in india 4th Edition (1990),Allahabad Law Agency, 36]

To understand the conception of coparcenary it is necessary to note the distinction between ancestral and separate property. The property inherited by a Hindu from his fathers father and fathers fathers father is ancestral property. Property inherited by other relations is his separate property. The essential feature of ancestral property is that if the person inheriting it has sons, grandsons or great grandsons, they become joint owners with him. They become entitled to it by reason of their birth. Father, son, sons son and sons sons son together constitute coparcenary, because they have common ownership in the ancestral property. No coparcenary can commence without a common male ancestor, though after his death it may consist of collaterals, such as brothers, uncles and nephews, cousins, etc. A member of a joint family may be removed more than four degrees from the common ancestors and yet he may be a coparcener. If he can demand partition he is a member of coparcenary. Only those members of joint family can demand partition who are within four degrees from the last holder of the property[footnoteRef:8] [8: ID 37]

Incidents of Hindu Joint Family:(a) A common male ancestor is necessary to bring the Hindu joint family in existence but is not necessary for its continuation. After the death of such common male ancestor the rest of the family continues to be a joint Hindu family. It is said that upper links are removed and lower links are added.(b) A Hindu joint family is purely a creature of law. This means, it cannot be created by the act of the members or an agreement between the parties. Therefore, a stranger cannot be made a member of a Hindu joint family even by agreement. The only exception is marriage and adoption[footnoteRef:9] [9: Supra 1,56]

(c) A Hindu joint family has no legal entity distinct or separate from its members. It is a unit and is represented by the manager of the joint family who is called Karta. It cannot be sued in its own name. It is neither a juristic person nor a corporation and therefore cannot convey the property in its joint character.(d) The status of a joint family member can be lost by conversion to another faith, by marriage to a non-Hindu, on being given in adoption by the competent parents, and for a daughter, on getting married.(e) All members in a joint family do not have equal rights in the family property. Coparceners have an interest in the coparcenary property while females and males other than coparceners or disqualified coparceners have a right of maintenance and a right of residence in the joint family house.(f) The continuation of a joint family is not dependent upon the presence of a male member in the family.(g) Plurality of members is necessary for constitution of or continuation of joint family but plurality of male members is not necessary for its continuation. The joint family does not end even with the death of a male member as long as it is possible in the nature of things to add a male member in the family.(h) A Hindu joint family may continue in perpetuity until it ends. Even where a partition is effected this joint family may break but does not end as in its place two or more joint families come into existence[footnoteRef:10]. [10: Supra1,57]

Incidents of coparcenership: A coparcener has an interest by birth in the joint family property, though until partition takes place, this is an unpredictable and fluctuating interest which may be enlarged by deaths and diminished by births in the family; every coparcener has the right to be in joint possession and enjoyment of joint family property both these are community of interest and unity of possession[footnoteRef:11]. Every coparcener has a right to be maintained including a right of marriage expenses being defrayed out of joint family funds,[footnoteRef:12] every coparcener is bound by the alienation made by the Karta for legal necessity or benefit of the estate and by the legitimate acts of management of the Karta; every coparcener has a right to object and challenge alienations made without his consent or made without legal necessity; and every coparcener has a right of partition and survivorship.[footnoteRef:13] he can establish his right of survivorship by suit[footnoteRef:14] [11: Kanta v Rajah (1863) 9 MLA 539; Venugopala v Uoi 1969 SC 1094] [12: Rajagopala v Venkatraman1947 P.C 122 Chandra v Kanak 1975 Del 175] [13: Sbi v Chamandiram 1969 SC 1330] [14: Sonam v Kunzang 1982 Sikiim 26]

In N. Jaya Lakshmi v. R. Gopala,[footnoteRef:15] where two brothers jointly acquired property and later on one of the brothers was not heard to be alive for seven years, the other brother would take the property by survivorship. [15: 1995 S.C 995]

(a) Four Generation Rule: The lineal male descendants of a person, up to fourth generation, acquire on birth, an interest in the coparcenary property held by him.(b) Creation of Law: Like a joint family, coparcenary is also a creation of law and cannot be formed by an agreement between the parties.(c) No stranger can be introduced in the coparcenary. Only a male child, born in the family or validly adopted, can become a coparcener. In Mitakshra coparcenary, no female except a daughter can be its member, though they are members of the joint family. It means that no female except the daughter has any interest by birth in the joint family property. She has no right of survivorship or partition, though if a partition takes place, certain females are entitled to a share.(d) Acquisition of interest by birth: A coparcener in a joint family is born with an interest in the coparcenery property which means that the moment he is born in the family he gets a right by birth in the ownership of the coparcenery property. Thus, if the family comprises the father and his two sons, all three of them have an interest in the coparcenery property.(e) Unity of Possession and Community of Interest: one of the basic features of coparcenery is unity of possession and community of interest.[footnoteRef:16] All the coparceners jointly own the coparcenery property and till a partition takes place and their shares are specifically demarcated no one can claim ownership over any specific item of the coparcenery property. This means that all coparceners have a right of common enjoyment or common use of the property. [16: Katama Natchair v The raja of shivagunga 1863 MIA 539]

(f) Unpredictable and fluctuating interest: The most remarkable feature feature of interest by birth is that the interest which a coparcener acquires by birth is not a specified or fixed interest. At no time before partition can it be predicted that he is entitled to so much share in the joint family property. Nor can he say that such items of property belong to him, even if the properties are in his possession or use. The interest fluctuates with the births and deaths in the family[footnoteRef:17] [17: Tundra v Tiwari 1972 M.P.l.J 400]

(g) Right of Maintenance: Every coparcener and every other member of the joint family has a right of maintenance out of the joint family property. The right of maintenance subsists through the life of the member so long as family remains joint. Female members and other male members who do not get a share on partition, either because they have no right, such as an unmarried daughter or because they are disqualified from getting a share, such as an idiot or lunatic coparcener, are entitled to maintenance even after partition. Unmarried daughters have a right to be married out of the joint family funds. Other members marriage expenses are also to be defrayed out of joint family funds.(h) Coparceners right to restrain and challenge alienation: When the father, the Karta, the coparcener and the sole surviving coparcener overstep their power, the alienation can be challenged. It can be challenged the moment the person entitled to challenge comes to know of it and till it is not barred by limitation. Whenever an alienation is challenged, the burden of proof is on the alienee to show that it was for a valid purpose. Even when sons challenge an alienation made by the father for discharging his personal debts, it is for the alienee to show that the debt was taken by the father, though if sons assert that the debt was tainted, the burden of proof that the debt was tainted is on the sons. Sometimes a stranger can also challenge an alienation, such as purchaser of a coparceners interest may challenge an improper alienation

(i) Coparceners right of partition: After the Amendment Act of 2005 a daughter since would be a coparcener shall have a right to ask for partition. As a general rule, both under the Mitakshara and the Dayabhaga schools, every coparcener has a right to partition and every coparcener is entitled to a share on partition. Apart from the coparceners, no one else has a right to partition. No female except the daughter has a right to partition, but, if partition takes place, there are certain females who are entitled to a share. These females are fathers wife, mother and grandmother etc. under the Hindu Right to Property Act, 1937, a Mitakshara coparceners widow took the same interest which her husband had at the time of his death. She was given the right to partition.

(j) Illegitimate son as a coparcener: Hindu law has never considered an illegitimate child as a filius nullius. An illegitimate son, particularly dasiputra has always regarded as a member of his putative fathers joint family and as such has a right to be maintained out of the joint family funds during his entire life. However, he is not considered as an coparcener. Among the sudras, his position is slightly better. During the life time of his father, he is not a coparcener with his father, and therefore has no right to ask for partition. But if partition takes place , the father is free to allot a share to him, even a share equal to a legitimate son. He is entitled to take only half a share of what he would have taken had he been a legitimate son.(k) Coparcenary between a sane and insane person: There can be a coparcenary between a sane and an insane person. A coparcener gets his right in the coparcenary property by birth and there is nothing in Hindu law which shows that such a right is irrevocably extinguished on a supervening insanity. If partition takes place he has no share in property, but this does not make him cease to be a coparcener. When he is cured of insanity, both his rights revive. In any case his son is not excluded from taking a share in the partition.[footnoteRef:18] [18: Kumar Rajeshwari Nandan v R.B Bhagwati Saran 1960 S.C.J 648]

(l) Coparcenary within coparcenary: It is possible that separate coparcenaries may exist within a coparcenary.

Rights of members of joint Hindu family:In a Hindu joint family, all its members do not have equal rights. The interest in the coparcenary property is with the coparceners, including a right to demand its partition, and a right to challenge its unauthorised alienation made by Karta. All other female members including the widows of deceased coparceners, and illegitimate sons of lineal male descendants, have a right of maintenance out of the joint family funds and a right of residence in the joint family home.[footnoteRef:19] [19: Supra 6, 292]

Ancestral Property:All property inherited by a male Hindu from his father, fathers father, and fathers fathers father, is ancestral property as regards his son, grandson and great grandson. Property inherited from any other relation is not ancestral property but it is the separate property of the person inheriting it. The essential feature of the ancestral property according to Mitakshara law is that the sons, grandsons and great grandsons of the person who inherits it acquire an interest in it by birth. Their rights attach to it by their birth. But according to Dayabhaga the male issue of the inheritor do not acquire any interest by birth in such property as they do according to Mitakshara law.A Hindu father or the managing member has power to make a gift within reasonable limits of ancestral immovable property for pious purposes. The properties of the following description are ancestral properties:(a) Accretions.- Accumulations of income of ancestral property, property purchased or acquired out of income of or with the assistance of ancestral property, the sale proceeds of ancestral property, and property purchased out of such proceeds or obtained in lieu of such property are all ancestral property and constitute joint family property.[footnoteRef:20] [20: Isree Prasad v Nasir Kooer (1884) 10 Cal 1017]

(b) Residue.- Where a member of a joint family has assigned his undivided interest to a creditor to satisfy claims to satisfy claims which do not exhaust the entire value of interest, any residue continues to be ancestral property.[footnoteRef:21] [21: Krishnaswami v Rajagopala (1895) 18 Mad 73,83]

(c) Savings.- Judicial Committee pointed out all savings made out of ancestral property and all purchases or profits made from the income or sale of ancestral property would form part of ancestral or coparcenery property, whether such savings or acquisitions were made before or after the birth of a son.[footnoteRef:22] [22: Lal bahudhur v Kanhiyalal (1907) 34 IA 65:29 ALL 244 (PC)]

Inherited Property.- Property inherited by two brothers from their father is ancestral property. If one of them alone has a son, that son by his birth acquires not only an interest in the share of his father but a right of survivorship even in respect of the rest of the propertyUnobstructed Heritage: ( Apratibandha Daya)Ancestral property is unobstructed heritage. The essential feature of unobstructed heritage, according to Mitakshara Law is that the sons, grandsons and great grandsons acquire an interest in the property inherited by birth. Their rights attach to it by their birth. The property is called unobstructed because the accrual of the right to it is not obstructed by existence of the owner. Thus, if A inherits its property from his father or grandfather or great grandfather it is ancestral property or unobstructed heritage in the hands of A is an obstruction to his son acquiring an interest but as regards other relations he holds it as his absolute property. If A has no male issue, other relations have no interest in the property during the life time of A.

Obstructed Heritage: ( Sapratibandha Daya)Property inherited by a Hindu from a person other than his father, grand father, and great gran father is obstructed heritage. It is called obstructed because the accrual of the rights to it is obstructed by the existence of the owner. The owner holds it as his separate and absolute property. The relations of the owner do not take a vested interest in it by birth. They are entitled to it only on the death of the owner. Thus, the property which devolves on parents, brothers, uncles, nephews, etc., on the death of the last owner is obstructed heritage. For example A inherits certain property from his brother. A has a son B. the property is obstructed in the life-time of A. B does not take any interest in it during the life-time of A. After As death B will take it as As heir by succession. The existence of A is an obstruction to the accrual of any right in the property to B.[footnoteRef:23] [23: Supra 10,40]

HINDU UNDIVIDED FAMILY Hindu Undivided Family (HUF) or a Joint Hindu Family Consists of all males lineally descended from common ancestor their wives and daughter. Any married Hindu, Sikh, Jain or Buddhist man can form HUF. HUF is automatically constituted on marriage. Few simple formalities to complete for HUF to function as legal entity Formed from blending of individual property with HUF character, Gifts, Joint Labour, Will, Partition or Reunion. There are two schools of Hindu Law i.e. Dayabhaga School of Hindu Law and Mitakshara School of Hindu Law. CO-PARCENERS:- 1. Some of the members of HUF are designated as coparceners. 2. All coparceners are members of HUF, all members are NOT coparceners. 3. Husband & Wife form HUF; wife can only be member, NOT coparcener. 4. Coparcener is different from the other members of HUF, coparceners are those members who acquires by birth an interest in the joint property of the family. 5. Coparcenary is restricted to four levels of living order. 6. Daughters also coparcener w.e.f. 9.9.2005 in the Hindu Succession (Amendment) Act, 2005. 7. After Hindu Succession Act amendments equal rights to daughters even after marriage. Married women have rights in two HUFs-their father's as coparcener and their husband's as member. There's no need to fill an application form or submit KYC documents for joining an HUF. 8. Members if the family who are not coparceners- No right to claim partition. 9. 1st Step Form a corpus for HUF can be any CAPITAL ASSET (like property, gold, jewellery, securities, deposits) or CASH. 10. Daughter of a coparcener shall by birth become coparcener in her own right in the same manner as son. 11. Daughter has the same rights in the coparcener property as she would have had if she had been a son. 12. Daughter is allotted the same share as to the son. Who can be a KARTA of HUF? The FATHER of the family in absence, senior male member of the family. Unmarried daughter, in the unfortunate event of her father passing away, will become Karta IF All male members are minors & natural guardian is mother then she is the Karta. Where a couple has only one daughter and the husband pass away, the mother-daughter duo can continue the HUF (although a problem may arise after she gets married and becomes a member of her husband's HUF). The Karta Have Various Duties that are Managing the affairs of HUF, Maintaining the books of accounts, filing tax returns for HUF, To enter in to contracts, form partnership firm, or representation on behalf of HUF. The various ways of Tax Saving through HUF General Benefits:-There are Separate exemption limit under Income-tax Act of Rs. 2,00,000, Separate deduction u/s 80G, Separate deduction u/s 80C(Insurance Premium can be paid on life on any member up to Rs. 1 lacks), Separate deduction u/s 80D(Medi-Claim) (Rs.15000), Section 80DD deduction for maintenance including medical treatment of a dependant who is a HUF member, Salary to Karta /Member, Separate Income-tax Deduction on Interest on loan for self occupied House Property in the name of HUF(Sec 24(b)) and There are Separate exemption of Wealth-tax for HUFs up to Rs. 30 lakhs Wealth and One House- Wealth Tax Free and Productive assets of HUF fully exempt from Wealth-tax. HUF can also take benefits of exemption of capital gain Cost Inflation Index benefit available to Calculate Cost of the Asset, Tax benefit of 20% Tax on Long-term Capital Gains.(Except for non listed shares-Without STT), Saving Tax on Long-term Capital Gain possible by investing in Capital Gains Bonds of NHAI / REC, Long-term Capital Gains Saving by investing in Residential Property, No capital gains to HUF on Distribution of assets on partition. Stock Market, Mutual Funds & HUF:-HUF can have a separate Demat Account and can Make money by investing in Primary Market and Secondary Market , Enjoy Tax Free Income for Long-term Capital Gains by holding shares for more than one year(STT Paid), HUF has 2 benefits in investing in IPOs i.e. the 2 lakhs limit for the investment to be categorized as retail is not breached and there is a greater probability of more shares being allotted, Enjoy lower tax rate of 15% on Short-term Capital Gains(STT Paid), HUF can also invest in mutual fund. HUF can be a Proprietor of one or more than one Business concerns, Separate name can be kept of HUF business entity. There are No requirement of tax Audit of HUF business if Turnover within Rs.1 crores.(AY-2012-13). The Business Income can be Computation @ 8% without books of account in case turnover is up to Rs. 1Crores The Presumptive Basis (AY 2012-13) There are 30% Standard Deduction on Annual value of house property (Rental Income) to HUF u/s 24(a), Self occupied one Residential House & the tax gain specially by way of Interest on Loan & Repayment of Loan u/s 24(b) and Exemption from Wealth-tax on 1 Residential house in the name of HUF. As per section 10(2) of the Income-tax Act, 1961 any sum received by an individual from Hindu Undivided Family of which he is member is exempt from tax but Amount received not as a member of Joint Family but in pursuance of some statutory provision, etc. would not be exempted in this clause and Member of joint family living apart from the other members does not affect his/her position in law to claim the right as per section 10(2). Taxation of money received by HUF without consideration 1. Provisions of section 56(2)(vi) applicable even to HUF if any sum of money is received by the HUF exceeding Rs. 50,000 p.a. 2. Items received in kind subjected to the provisions of sec. 56(2)(vi). Gift of HUF Property 1. Elementary proposition that Karta of HUF cannot gift or alienate property except to the extent recognized under the Hindu Law, namely necessity etc CGT v. P.Hanumanthappa 68 ITR 363, K.P. Gupta v. CIT 233 ITR 456 2. Reasonable limits depends upon facts - CGT v. B.V. Narasimharaju 101 ITR 74 3. Karta can make reasonable gifts to daughters Sushil Kumar & Sons v. ITO 234 ITR 98 4. Gift on Marriage Occasion is valid S. Lakshmamma v. Kotayya AIR 1936 Mad. 825. 5. Gift of immovable property should be for pious purpose CIT v. Ram Gopal Rajgharia 123 ITR 693 6. Gift to Strangers void Guramma v. Mallappa AIR 1964 SC 510. Gift by a member of HUF As per section 64(2) a gift by a member of a Hindu Undivided Family after 31-12-1969 would attract Clubbing of Income in the hands of the member and as such the income from the converted property shall be deemed to arise to the individual & not to the family. Partition of the HUF Only coparceners can demand partition. These are of two types-Total Partition: Property divided amongst all the family, undivided family ceases to exist , Partial Partition: Some family members go out of fold and others remain joint or some of the property is divided and other remains joint not recognized for tax purpose, after 31.12.1978 As per section 171(9) of the Income-tax Act, 1961 the Partial Partition after 31-12-1978 is not recognized. Even after Partial Partition the income of the HUF shall be liable to be assessed under the Income-tax Act as if no Partial Partition had taken place. Procedure to effect partition Under the Hindu law HUF may be ended by portioning the property (or whatever assets) of the HUF, but for IT purposes are to be recognized by the AO. Share in assets of HUF: All coparceners, mother(in case of death of father), wife gets a share separate from husband in case of partition between her husband and sons, son in womb of mother at time of partition At the time of making assessment u/s 143, 144, its claimed by any member that the partition has taken place AO shall make inquiry after giving notice. After inquiry AO shall record finding as to whether there has been TOTAL PARTITION DATE of such partition. Order u/s 171 passed by AO Where partition took place in the previous year is recorded by AO: Income of HUF before partition shall be assessed as no partition has taken place. Each member shall be liable separately and jointly for the income tax thereon For this section several liability of any member or group of member shall be computed according to portion of joint family property allotted to him or it at partition. The provisions are applicable in levy and collection of any penalty, interest fine or any sum for period up to partition date Total partition in the context of the I. T Act means partition by "Metes and Bounds. The Income Tax law will recognize its demise (for want of a better word, since a divided Hindu family can be reunited again),only when the HUF each and every layer of the clothing of property-tangible or intangible, movable or immovable -it had has been removed There are various advantages of HUF Helps avoid service tax: If business turnover is split by setting up HUF, the service provider can avoid the hassle of charging service tax and become small scale service provider. Salary to Karta: This salary is taxed as his income and will be fully deductible from the HUF income. Use HUF income for expenses: The income earned by the HUF can be used for the household expenses of the family. Distribute income to coparceners: Karta can gift money to the coparceners from the income earned by the HUF. This income is tax-free in the hands of the coparceners. This way, person with a high income will be able to get tax-free income. Give loan for business: HUF can give loans to the Karta or coparceners for setting up business & can charge interest on the loan. Interest paid on any business loan is fully deductible. No MAT or AMT: unlike other corporate entities, no minimum alternative tax on HUF owned businesses. Small-scale industry exemption: or the business community, various exemptions and incentives given to small-scale units are crucial to ensuring healthy margins. HUFs can be made better by the following ways In May 2005, the government passed a rule PREVENTING HUFs from opening new accounts in the Public Provident Fund. All existing accounts, which had completed 15 years since the initial deposit, were also to be closed by 31 March 2011, HUF CANNOT invest in other government securities such as the National Savings Certificates, as well. These restrictions should be done away with. Why should HUFs be treated differently from any other taxpayer, If the Karta of the HUF is crucial for its smooth functioning, the HUF should be allowed to take a Key man life insurance cover for him and should be made the nominee, Hindu Succession Act accords equal rights to female coparceners of an HUF, its only applicable to the Mitakshara school, it should be applicable to Dayabhaga school (West Bengal and Assam) as well, Kerala does not have a HUF system. For the sake of uniformity, the same rules should apply across the country, HUFs are not eligible for some tax benefits enjoyed by individual taxpayers. They should also be able to claim deduction for interest paid on education loans, benefits for pension fund contributions. Bibliography

Dr.Poonam Pradhan Saxena, Family Law Lectures, 3rd Edition(2013), Lexis Nexis M.P Tandon, Family Law in India , 4th edition (1990), Allahabad Law Agency Dr.Paras Diwan, Modern Hindu Law(2014), Allahabad Law Agency