PAN Card for Hindu Undivided Families (HUFs)

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PAN Card

A PAN Card is a very important document for Hindu Undivided Families (ḪUFs), second only to the HUF Deed. It establishes the HUF as a financial entity that can open bank accounts, buy property and make investments, among other things. In this article, we’ll examine how an HUF can get a PAN Card, open a bank account, the tax benefits available to it and go over the HUF concept, too.

How to Get a PAN card for an HUF

An HUF is a separate entity, like a company or partnership. It can, therefore, apply for a PAN card all by itself. Without a PAN card, it would not be able to do any of what an HUF is set up to do, which is to enter into financial transactions.

Get an HUF PAN

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Details for HUF PAN Card Application
1. The name of the HUF (or the name of the Karta [patriarch of the family], followed by ‘HUF’)
2. HUF’s address and residence proof
A. Copy of Karta’s Aadhaar card;
B. Copy of Karta’s Voter ID;
C. Copy of Karta’s driver’s license or passport;
D. Copy of Karta’s Ration card;
3. Source of income to the corpus;
4. Names, father’s name and addresses of all coparceners of the HUF, with affidavit made by the Karta;
5. Signature of the Karta on the completed Form 49A.

If the documents are in order, the PAN card would arrive around 21 days after submission. You can check its status here.

How to Open an HUF bank account

Once the PAN card has arrived, the HUF can finally open a bank account. The necessary documents/information required are:

1. The name of the HUF;
2. Photograph of the Karta;
3. Proof of address and identity of the Karta;
4. PAN card and PAN number of the HUF;
5. The list of coparceners and members;
6. A declaration by the Karta as to which members and coparceners are authorised to operate the bank account;
7. Any further details as demanded by the bank, at the time of the opening of the account;

The bank account will be in the name of HUF and the Karta, and only those authorised by the Karta may operate it. An HUF bank account is a current account, which would attract higher charges from the bank.

HUF Eligibility & Deed Creation

Hindu Only: Hindu, as per the law, includes Sikh, Jain or Buddhist families, in addition to Hindu.

Creating a Corpus: It must be set up first by forming a corpus. Any assets transferred to a will or ancestral property or any gifts from a relative can be used to create a corpus. Once you have established the corpus, the deed for HUF can be created.

Stamping the Deed: A deed is a stamp paper document, with the name of the Karta, coparceners, and members. The deed also should include the address, bank details and the source of income from where the corpus will be funded. A declaration (by the Karta) of all coparceners and members authorised to perform financial transactions is to be attached to the deed.

Who can be included in an HUF?

1. An HUF can be created by a joint family of, say, for instance, a father and two sons, all married and doing business together. Anyone by birth is included in the family.

2. A husband and wife can also form an HUF for tax benefits and to share the income earned from collective and ancestral properties. The eldest male member becomes the Karta (or the head) and has the authority to operate the accounts and other assets details under the HUF.

The members of the family that can be included in an HUF are:
a. Sons and daughters (Married and unmarried)
b. Husbands and wives
c. Grandsons and great-grandsons

Both sons and daughters are termed coparceners (according to Hindu Succession Act, all daughters are now also classified as coparceners) and have the right to become the next Karta, in the event of the death of the present one.

Anyone by birth or marriage will become a member of the HUF. However, only coparceners can succeed the Karta. Members do not have this privilege.

Tax benefits available to HUFs

An HUF, as it is a separate entity, is taxed separately from its members and coparceners. Thus, the deductions and exemptions under Section 80 can be claimed by the HUF as well, thereby lowering individual tax liability. Similarly, rebates can be sought on loans taken, rent paid and other expenses.

This is why chartered accountants generally advise all Hindu married couples to form an HUF. Generally, HUFs end up paying 30% less tax than others.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.

13 COMMENTS

  1. Dear Mr.Vikram, I remembered of My Pan Card than Individual is of H.U.F PAN CARD which is misplaced so how can i check status of the same and apply for same number ! I have aadhar card/electric bill available with me

  2. My affidavit says that “the above said HUF is existing since 03 Jan 2017” for stamp paper and notary attested it on 04 Jan.

    Which date should I mention as birth of HUF ?

  3. My affidavit says that “the above said HUF is existing since 03 Jan 2017” but I bought stamp paper next day and notary attested it on 04 Jan.

    Which date should I mention as birth of HUF ?

  4. I HAVE KARTHU OF HUF A/C HOLDER NUMBER & PAN CARD & 2 SONS HUF PANCARD
    BUT MOTHER MEANS KARTHU WIFE CARD & NUMBER WE ARE NOT RECIEVED
    HOW TO GET THAT NUMBER & CARD
    WE DO NOT HAVE ACKNOLEDGEMENT SLIP ALL SO

  5. I applied for HUF PAN through my CA one month before. My CA informed that it has been allotted but yest he has not given me PAN Number even my repeated reminders. I asked him to give me Coupon Number so that I may check, but has not given me. I doubt he has submitted application or not…. how I can check? or I may re-submit my application for PAN-HUF?

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