1. Assessment of
Hindu Undivided Family
Presented by:
Shankar Bose
Inspector of Income-tax
MSTU, Puri

2. Hindu Undivided Family
 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.
 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
 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.
 The successor in Mitakshra has to share the right to inherited property with others
 The successor in Dayabhaga has absolute ownership on inherited property.
 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.

3.  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.
 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.
 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.
 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.
 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.
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).

4.  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.
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.
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.
 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.
 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).
Thanks