Streamline your tax compliance with our expert-assisted GSTR 9 & 9C services @ ₹14,999/-

Tax efficiency, interest avoidance, and financial control with advance payment @ 4999/-

PAN Card for Hindu Undivided Families – HUF PAN Card

In this post, we'll look at the tax advantages accessible to a HUF, how it may open a bank account and obtain a HUF PAN card.

In the realm of taxation, Hindu Undivided Family (HUF) offers distinct advantages. Recognized as a separate assessable entity under both the Income Tax Act and the Wealth Tax Act, HUF holds a unique status. This article delves into the intricacies of HUF PAN Card.

Linking Aadhaar to PAN by 30th June 2023 will result in PAN becoming inoperative on 1st July 2023.

What is HUF?

HUF, an abbreviation for Hindu Undivided Family under Hindu Law, comprises all living individuals who share a common ancestor, along with the wives and daughters of these individuals.

As per a section of the Income-tax Act of 1961, HUF is categorized as a “person” for assessment purposes under the Act. Functioning as an independent tax-filing entity, HUF possesses its own Permanent Account Number (PAN). The key constituents of HUF include the “karta,” typically the eldest member or head of the family, and other family members.

The day-to-day affairs of HUF are overseen by the “karta,” with children being recognized as coparceners of their father’s HUF. Even upon marriage, a daughter retains her coparcenary status in her father’s HUF while also becoming a part of her husband’s HUF. It’s noteworthy that Jain and Sikh families can establish HUFs, even if not bound by Hindu law.

HUF Eligibility 

Only Hindu, as per the law can create a HUF, the term hindu includes even Sikhs, Jains and Buddhist families.

HUF Deed Creation

A HUF must first be formed by establishing a corpus. Any assets left to a will or ancestral property, as well as any donations from a relative, might be utilised to establish a corpus. Once the corpus has been established, the HUF deed may be prepared.

The deed must be written on stamp paper and signed by the Karta, coparceners, and members. The deed should also specify the address, bank information, and source of income from which the corpus will be funded. The deed must include a declaration (by the Karta) specifying all coparceners and members authorised to conduct financial operations.

Tax Benefits Available to HUFs

An HUF is taxed separately from its members and coparceners since it is a distinct entity. As a result, the deductions and exemptions available under Section 80 can be claimed by the HUF as well, minimising individual tax burden. Similarly, refunds on loans, rent, and other expenditures might be requested.

This is why most chartered accountants recommend that all Hindu married couples join a HUF. In general, HUFs pay 30% less tax than other entities.

Who Can be Included in an HUF Pan Card?

  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 also 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 under the HUF.

The members of the family that can be included in Pan Card for HUF are:

  1. Sons and daughters (married and unmarried)
  2. Husbands and wives
  3. Grandsons and great-grandsons

Both sons and daughters are termed coparceners (as per amendments to the 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.

How to Get a PAN Card for HUF?

An HUF is a distinct legal entity, similar to a corporation or partnership. As a result, it can apply for a PAN card in its own name.  Without a PAN card, a HUF won’t be unable to perform any of the financial functions a HUF is set up to do.

Documents Required for HUF PAN Card Application

  1. The name of the HUF (or the name of the Karta, followed by ‘HUF’)
  2. HUF’s address and residence proof
  • Copy of Karta’s Aadhaar card;
  • Copy of Karta’s Voter ID;
  • Copy of Karta’s driver’s license or passport;
  • Copy of Karta’s Ration card;
  1. Source of income to the corpus
  2. Names, father’s name and addresses of all HUF coparceners, with affidavit from the Karta
  3. Signature of the Karta on duly filled Form 49A.

If all of the documentations are in order, the HUF PAN card should follow within 21 days after application submission. You can check its status here.

Checklist to Open an HUF Bank Account

The HUF can immediately establish a bank account once the HUF PAN card arrives. The following documents/information are required:

  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 bank account

The bank account will be in the names of the HUF and the Karta, and it will be accessible only to those authorised by the Karta. Do note that an Huf Pan Card bank account is a current account, which may incur higher bank fees.

Frequently Asked Questions

Is it mandatory for Hindu Undivided Families (HUFs) to obtain a PAN card?

No, obtaining a PAN card is not mandatory for HUFs. However, it's highly recommended for various financial transactions and tax benefits. What is the purpose of having a PAN card for an HUF in India? Facilitates financial transactions exceeding specific limits. Enables filing income tax returns for the HUF. Prevents misuse of HUF funds and ensures transparency.

Who in the HUF is responsible for applying for and managing the PAN card?

The Karta, or the head of the HUF, is responsible for applying for and managing the PAN card for the HUF.

What documents are required for applying for a HUF PAN card?

The documents required for applying for a PAN card for an HUF include the name of the HUF or the Karta, HUF's address and residence proof, and a copy of the Karta's Aadhaar card.

Can an HUF have multiple PAN cards for different members or business activities?

No, an HUF cannot have multiple PAN cards for different members or business activities. Only one PAN card is issued to an HUF.

Is there a specific format for the PAN card application for Hindu Undivided Families?

Yes, Form 49A is used for applying for a PAN card for HUF in India.

What is the processing time for obtaining a PAN card for an HUF in India?

The processing time for obtaining a PAN card for an HUF in India is typically 15-20 business days.

What happens if there are changes in the HUF structure or details after obtaining the PAN card?

The processing time for obtaining a PAN card for HUF in India is typically 15-20 business days.

Are there any fees associated with applying for or updating a PAN card for an HUF?

Yes, there are fees associated with applying for or updating a PAN card for an HUF, which may vary depending on the specific circumstances.

How can an HUF track the status of their PAN card application?

HUFs can track the status of their PAN card application by visiting the official website of the Income Tax Department and using the application number or acknowledgement number.

Read More


Subscribe to our newsletter blogs

Back to top button


Remove Adblocker Extension