# HUF Formation — Deed, PAN & Bank Account

> A Hindu Undivided Family arises automatically on marriage among Hindus, Jains, Sikhs and Buddhists; 'registering' an HUF means documenting it with a declaration deed, getting a PAN in its name and opening its bank account so it can hold assets and file its own return. The HUF gets its own basic exemption and deductions, but gifts from members into the HUF are clubbed back to the member — so its corpus should come from gifts by outsiders, inheritance or ancestral property.

Practice: Business Setup & Entity Registration — https://www.industax.com/services/business-setup/

The karta (usually the eldest male member, or a female member as several High Courts have upheld) manages the HUF, and coparceners have a right by birth in its property. The deed records the karta, members and the initial corpus. There is no government registration; the PAN application in the HUF's name is the formal step.

We prepare the deed, the PAN application and the bank letter, and — more importantly — advise on what the HUF can legitimately receive. Many HUFs fail scrutiny because the corpus came from the karta's own money, which Section 64(2) clubs back to him.

## Key facts

| Item | Detail |
| --- | --- |
| Who | Hindus, Jains, Sikhs and Buddhists |
| Formation | Arises by birth/marriage; documented by a declaration deed |
| PAN | Applied for in the HUF's name, signed by the karta |
| Tax | Separate basic exemption and deductions such as 80C |
| Clubbing trap | Member's own gift to HUF is taxed in the member's hands (Section 64(2)) |

## Who needs this

- Families with ancestral property or inherited assets
- Business families holding investments jointly
- Families wanting a separate taxpayer for legitimately received assets

## What's included

- HUF declaration deed
- PAN application for the HUF
- Bank account documentation
- Corpus and clubbing advice

## Documents

- Karta's PAN and Aadhaar
- Details of members and coparceners
- Proof of corpus (gift deed from an outsider, will, partition documents)

## Process

1. **Document** — Deed drafted with karta, members and corpus.
2. **Register** — PAN obtained and bank account opened.
3. **Operate** — Investments held and ITR filed in the HUF's name.

## Also covers

- **HUF deed** — Declaration of formation and members.
- **HUF PAN** — PAN application in the HUF's name.

## FAQs

### Can a woman be the karta of an HUF?

Since the 2005 amendment to the Hindu Succession Act, daughters are coparceners by birth, and courts including the Delhi High Court have held that the eldest coparcener, even if female, can be the karta.

### Is an HUF still useful under the new tax regime?

An HUF gets its own slab benefits under either regime, so income legitimately belonging to the HUF is taxed separately from the members. Its value depends on having genuine HUF assets; it isn't a way to split salary or business income.

### How is an HUF closed?

By total partition among members, documented with a partition deed and reported to the Assessing Officer under Section 171. Partial partition is not recognised for tax purposes after 1978.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/services/business-setup/huf-deed-pan-registration
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.