A HUF can acquire its assets on partition of HUF of ancestors of its coparceners.

Karta of a HUF
can also receive assets by way of gifts from non family members provided the donor gives specific
direction that the gift is made for the benefit of the HUF. A HUF can also acquire assets under a
Will thorough a specific bequest in favour of the HUF by the deceased. Even members of the HUF
can also throw their personal property in the common hotchpot of the HUF.  However any income
arising from such transferred asset shall be clubbed with the income of the donor till the assets of
the HUF are distributed. After distribution of such HUF property the share of the HUF property
which is allotted to the wife of the transferor will still continue to be clubbed with the income of the
transferor. members of the HUF are treated as relative of the HUF, the gifts received from the mem-
bers will not be taxable under Section 56(2) at the time of receipt of the gift but the gifts received
from non members shall become fully taxable if the aggregate of all gifts received by the HUF dur-
ing the years exceeds Rs. 50,000. However the gifts upto Rs. 50,000/- in a year received by a HUF
from non members are fully exempt under Section 56(2). In case of gifts through cheque or mov-
able assets, no registration is required to be done but in case of gifts of immovable property such
gift needs to be registered and adequate stamp duty is also required to be paid.
Succession and transfer of HUF property
The coparcener of the HUF cannot gift or transfer their rights in the assets of the HUF during their
lifetime but are entitled to bequeath their share in the assets of the HUF through a Will. Prior to
amendment of the Hindu Succession Act, the rights of the coparcener in the HUF property used to
devolve on the surviving members of the HUF but now the situation is changed. In case no Will is
made by the coparcener, the share of the deceased in the HUF property passes to the successors as
mentioned in class 1 of the first Schedule of the Hindu Succession Act, 1956. The assets acquired
by such successors become their absolute property which they are entitled to dispose off the way
they want.
Partition of the assets of the HUF property
Since all the coparceners have right in the assets of the HUF so the Karta cannot dispossess any co-
parcener of his right. In case the coparcener demands partition of the assets of the HUF, the karta
has to give his share to such coparcener from the assets if the HUF. Though as per the Hindu Law
partial partition of the HUF either as regards the assets or as regards members is fully valid but the
income tax laws do not recognise such partial partition of the assets of the HUF. The income tax
laws require that partition of HUF should be full as regards all the assets as well as in respect of all
the members. So unless there is full partition of the HUF, the income arising in respect of the partly
distributed assets shall be continued to be taxed in the hands of the HUF.
Liability to render accounts:- As long as family remains joint, Karta is not supposed to keep ac-
counts, but when partition takes place at that time he is liable to account for family property. If any
of the coparcener is not satisfied with his account can institute a suit against Karta to discover the
truth and to know any misappropriation is made by Karta. Liability not to alienate coparcenary
property:- Unless it is for benefit of family, estate or for necessity Karta cannot alienate joint family
property without the consent of all the coparceners. It is at the will of the co-parceners and members
as to whether to allot on partition in accordance with the share specified under the Hindu Succes-
sion Act or to allot lower or more to anyone or more persons. You can also execute a relinquish-
ment deed.
When the Karta of the HUF has expired then bank account remains the same subject to submission of decla-
ration cum no objection letter to the bank from the new Karta and co-parceners . The letter shall provide the
following information.
Request to delete the name of deceased Karta from bank’s record (type and account number to be specified)
with the copy of death certificate.
Name of newly appointed Karta to be mentioned and his relationship with the deceased Karta.
Request to register update the name of new Karta of the specified HUF account in place of deceased Karta
and allow him to operate the said HUF account.
No objection for appointment of (Name of the member) new Karta of HUF account
The declaration cum no objection letter from co-parceners for deletion of name of existing Karta and ap-
pointment of New Karta to be signed by the new Karta and all the major co-parceners of the family.
In case of larger balance in the HUF account many banks obtain affidavit cum indemnity from surviving
members and legal heirs with two guarantors confirming their acceptance to one of the members as a new
Karta. Banks shall allow the new Karta to continue to operate the existing account on the basis of such docu-
ments, in HUF accounts. A similar procedure to be followed in cases where an account is to be closed and
balance in the account to be paid to the new Karta. Document requirement may be different in different
banks.
The Karta is traditionally the senior most male coparcener of the HUF.  When Karta of the HUF dies, the
next senior male member takes over as Karta. If the senior most member gives up his right, a junior co-
parcener can become Karta of the HUF, with the consent of all other major co-parceners  as held by Supreme
Court in Narendra Kumar J. Modi Vs CIT (1976) 105 ITR 109 (SC).
As per Hindu Succession (Amendment) Act, 2005 the daughters of a family who are governed by Mitakshara
Law, also become co-parceners in the HUF property. The above amendment further gave the women the
right of survivor ship via amended Section 6 (1) (a) and (b) of Hindu Succession Act, 1956. This amendment
gave them equal rights as the sons.Persons who have right to partition
1) Father:- Father has not merely a right to partition between himself and his sons can also effect
partition among his sons. Every father can make partition of his self acquired property also (means
distribution of his property as per his wishes).
While doing this consent of sons is immaterial. Father can impose partition partial or total, even be-
tween minor sons and himself. But this act of him must be bonafide. Otherwise minor son after at-
taining majority can file for reopen of partition.

2) Sons, Son’s Son, Son’s Son’s Son:- Every S, SS, SSS are entitled to partition but under Bombay
School when father is joint with his father or brothers consent of father is essential.
If joint family consist of father and sons then son can ask for partition.

3) Son born after partition:- Smritikaras has different opinions on this.

Vishnu and Yajnavalkya – Partition should be reopened and share has to allot to after born son.

Manu, Gautama, Narada – after born son could get share of his father alone.

Mitakshara school formulated a general procedure by applying both principles but in different situa-
tions.

i) Son conceived at the time of partition but born after partition (unborn son)
When person is in mother’s womb under Hindu Law for many purposes equivalent to born child.
When mother is pregnant partition has to postponed until delivery. But if coparcener does not want
to postpone then has to reserve a share to unborn son and go for partition otherwise child (son) can
file a suit for reopen of partition after his birth.

ii) Son begotten and born after partition (after born son)
If any son born after partition and he was not even in mother’s womb then the following rules ap-
ply.
a) When father has taken his share in partition then he becomes coparcener only in father’s share.
b) When father has not taken his share then after born son has a right to get partition reopened and
get the estate redistributed.

iii) If father renounces his share

When father renounces his share, son born after renouncement is not entitled to get any right in the
joint family. He will be remained as coparcener in father family.

iv) Adopted Son

Position of adopted son also differs with situation.
a) When there is a subsequently born natural son.
b) When there is no subsequently born natural son.

When natural son born after adoption then adopted son interest differs from school