1. What is a Hindu Undivided Family (HUF)?
A Hindu Undivided Family (HUF) is a family unit recognised as a separate legal entity for tax and investment purposes.
2. Who is called the Karta in a HUF?
The head of a HUF is called the Karta. It is the senior-most co-parcener of the family.
3. Who can be a co-parcener in a HUF?
A co-parcener is a person who has a legal right to ancestral property by birth and is a member of a Hindu Undivided Family (HUF). All children of a co-parcener (male or female) automatically gain co-parcenary rights. However:
- A married woman who joins the HUF does not gain co-parcenary rights but becomes a member of the family
- The Karta's wife cannot become a co-parcener
4. How many co-parceners are required to open a HUF trading and demat account?
You need two co-parceners to open a HUF trading and demat account.
5. Can the Karta act as a co-parcener in a HUF?
Yes, a Karta can act as a co-parcener in the HUF.
6. Who can become a co-parcener in a HUF?
The Karta's children can become co-parceners of the HUF. The age of the children does not matter to become co-parceners.
7. Can the Karta's wife become a co-parcener in the husband's HUF?
No, the Karta's wife cannot become a co-parcener in the HUF. However, she can be considered a member of the HUF.
8. Can a husband and wife open a HUF trading and demat account with Zerodha?
Yes, a husband and wife can open a HUF trading and demat account with Zerodha even without any co-parceners.
9. Can a husband, wife and child open a HUF trading and demat account?
Yes, the husband will be the Karta and act as 1 co-parcener, and the child will be the 2nd co-parcener. The wife will be a member of the HUF.
10. Can a female become the Karta of a HUF?
Yes, the eldest daughter can become the Karta of her father's HUF after the demise of the father.
11. Who can act as a Karta in the event of the decease of the present Karta?
The eldest child can act as a Karta in the event of the decease of a present Karta. The wife of the deceased Karta can only be a member of the HUF.
12. Can a younger child act as a Karta in a HUF?
In the event of the current Karta's demise, if the eldest son or daughter declines to act as the Karta, the younger son or daughter may assume the role by submitting a signed and notarised legal agreement or declaration.
13. Can the Karta's siblings become co-parceners to open a HUF trading and demat account?
No, the Karta's siblings cannot become co-parceners to open a HUF trading and demat account.
14. Can two siblings come together to form HUF?
No, a HUF cannot be formed among siblings. However, it can be formed with their father as the Karta. Upon the father's demise, one of the siblings can become the new Karta and continue the HUF.
15. Can a minor son or daughter become the Karta?
Yes, a minor son or daughter can become the Karta if the current Karta dies. However, there must be at least two minor sons or daughters, as one will act as the Karta and first co-parcener and the other as the second co-parcener of the HUF. The mother will continue to remain a member of the HUF and will act as the guardian having signing authority.
16. Can the HUF account continue to exist if the Karta demises and has only one child?
No, you must dissolve the HUF as two co-parceners are required to maintain a HUF account.
17. What documents are required if the wife (coparcener/member) of the HUF has passed away or if there is a divorce?
You must submit a death certificate in case of death, or a divorce certificate in case of divorce.