Jul 8, 2018

What is an HUF Account?

HUF account refers to Hindu Undivided Family account. A Hindu Undivided Family is the one where the husband, wife, children and children’s spouses (if any) all live together on the ancestral property. A legally declared HUF runs on a specific set of laws governing the marriages, ownership of the property, taxation and so on. 

In HUF Bank account, an entity is created where all the members of the HUF can deposit their incomes. This entity is managed by the Karta i.e. the senior most member of the family. For every transaction at the bank, the signature of the Karta is mandatory.
Features of an HUF account:
The below mentioned features of a HUF account which makes it different from a savings account:
1. All the members of a HUF are allowed to deposit their income within this common entity.
2. While all others members are allowed to participate, the authority of the account remains in the hands of the Karta. 
3.  There are various tax benefits available under different sections of Income tax.
4. The division of this entity can only happen at the approval of all the co-parceners.
Documents required for an HUF account:
1. The HUF should have a unique Pan Card, which is to be produced along with the PAN card of the karta.
2. A declaration form, signed by all the members of the family is to be submitted to the bank.
3.  ID proof of the karta. 
4.     Residential proof of the karta. 

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