Can grandchildren be appointed as Karta of Hindu Undivided Family (HUF)?

My grandfather was working his HUF checking account in Syndicate Bank as Karta of the HUF and paying common taxes. He handed away in June 2023 forsaking two grandsons, two daughters, and his spouse. His son (my father) handed away 12 years again. Who can now turn into the Karta of the HUF and keep it up the account transaction? What is the process to observe with the financial institution on this case?

Answer: Under the Hindu legal guidelines the senior most grownup coparcener turns into karta of the HUF. The similar rule applies to the appointment of Karta after the demise of an present Karta. Earlier solely male members had been thought-about as coparceners and thus had been eligible to turn into Karta of a HUF however after the modification of the Hindu Succession Act, 1956, in September 2005 daughters and sons each are to be handled as coparcener. So seniormost daughter of your grandfather i.e. your eldest aunt can turn into Karta of the HUF. If any or each the aunts are unwilling or incapable to be appointed as Karta of the HUF, the eldest of you or your brother can turn into Karta of the HUF supplied one is an grownup.

No main formalities are required to be complied with. Though the subsequent senior most coparcener mechanically turns into the brand new karta of the HUF at instances, statutory authorities could require a declaration from all members of the HUF declaring the eldest coparcener as the brand new karta of the HUF. Further, a declaration from the members of the HUF together with the demise certificates of the previous karta could also be mandated by banks as a way to give impact to the change of title of the Karta within the HUF’s checking account. Let me inform no succession certificates is required within the case of a HUF although some banks do insist on the identical on account of ignorance of the precise legislation.

Balwant Jain is a tax and funding professional and may be reached at jainbalwant@gmail.com and on @jainbalwant on Twitter.

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Updated: 02 Aug 2023, 11:08 AM IST