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Mint
02-06-2025
- Business
- Mint
How does the ownership and succession of HUF assets work?
HUF and HUF assets are two different concepts, as it is not necessary for an HUF to own assets. An HUF may exist because there are two or more living coparceners, but it may not own any assets. This is because Hindus get joint family status by birth, and joint property is simply an adjunct to the joint family. Let us discuss various aspects related to owning and succession of assets with special reference to HUF. Karta of an HUF can receive gifts on behalf of the HUF from non-family members, provided the donor gives specific direction that the gift is made for the benefit of the HUF. An HUF can also acquire assets under a 'Will' through a specific bequest in favour of the HUF by the deceased. Even members of the HUF can also throw their personal property into the common pot of the HUF, but any income arising from such transferred assets shall be clubbed with the income of the donor till the assets of the HUF are distributed. Even after the distribution of such HUF property, the share of the HUF property allotted to the spouse of the transferor will still continue to be clubbed with the income of the transferor spouse. Since members of the HUF are treated as relatives of the HUF, the gifts received from the members are not treated as income of the HUF under Section 56(2) at the time of receipt of the gift, and thus, the HUF can receive gifts of any value from its members. Please note that the gifts received from non-members shall become fully taxable in the hands of the HUF if the aggregate of all the gifts received by the HUF during the years exceeds ₹ 50,000. As long as the aggregate value of all the gifts received from non-members during the year does not exceed ₹ 50,000, the same is not to be treated as income of the HUF. In case of gifts through cheque or movable assets, no registration is required to be done, but gifts of immovable property need to be registered, and adequate stamp duty is also required to be paid. The coparceners 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 HUF assets through a 'Will'. Prior to the amendment of the Hindu Succession Act in 2005, the property of HUF used to devolve on the surviving coparceners of the HUF by survivorship, but the situation has changed post the amendment. In case no 'Will' is made by the coparcener, the share of the deceased coparcener in the HUF property passes on to the legal heirs 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 of in the way they want. Since all the coparceners have rights in the assets of the HUF, the Karta cannot dispossess any coparcener of his rights in the HUF assets. In case any coparcener demands partition of the assets of the HUF, the karta has to give their share of the HUF assets to such coparcener. 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. The income tax laws require that the partition of HUF should be full as regards all the assets as well as in respect of all the members. So, unless there is a full partition of the HUF, the income arising in respect of the partly distributed assets shall continue to be taxed in the hands of the HUF. The assets received by the coparceners on partition are his/her personal assets. The partition of the HUF needs to be taken on record by the income tax department and an order needs to be obtained recording such full partition. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
News18
13-05-2025
- Business
- News18
7 Situations In Which Daughters May Not Automatically Inherit Property
Last Updated: May 13, 2025, 11:51 IST Property disputes are common within families—between brothers, between fathers and children, and even among daughters, as they too have property rights. The Hindu Succession (Amendment) Act, 2005, has provided equal rights to daughters in their father's property. However, this right is subject to specific conditions. (News18 Kannada) Self-Acquired Property: If the father has purchased the property with his own earnings, he has full rights over it. Whether he sells the property, gifts it, or bequeaths it to someone in his will, the decision is entirely his. If it is not ancestral property, daughters have no automatic legal right. However, if the father has mentioned the daughter in his will, she will be entitled to the property. (News18 Kannada) Partition Before 2005: If the ancestral property was legally divided and registered before 2005, daughters cannot claim rights over it. Courts have upheld such earlier partitions as valid. However, if the partition was unequal, it can be challenged in a court of law. (News18 Kannada) Gifted Property: If the ancestor gifted the property to someone and the gift deed is legally valid, daughters will have no right to that property. The law does not revoke such legally executed gifts. (News18 Kannada) Voluntary Renunciation: If the daughter signs an agreement voluntarily relinquishing her share of the property, for example, in exchange for money or other benefits, she forfeits her right. However, if the agreement was signed under duress or fraud, she can challenge it in court. (News18 Kannada) Exclusion From Will: If the father has drafted a valid will and has explicitly excluded his daughter from inheriting the property, she will not be entitled to a share. The law gives precedence to the will. However, if the will was created under duress or fraud, she can contest it legally. (News18 Kannada) Property Settled In Trust: If the property has been transferred to a trust or legally transferred to someone else, daughters will have no right to inherit it. Properties held in trust are protected under the law. (News18 Kannada) The Hindu Succession Act, 2005, has given equal rights to daughters in property. However, these rights are occasionally restricted due to the above conditions. Before property disputes strain family relationships, it is advisable to seek legal counsel and obtain proper clarification. Supreme Court judgments also offer guidance in such matters. (News18 Kannada)
Time of India
11-05-2025
- Business
- Time of India
Flowers, Cake & Gift of Knowing Inheritance Rights for Mom
Many mothers lose their rightful share in property and wealth because of sheer ignorance about succession laws for women. So, as you celebrate Mother's Day with flowers and gifts, make sure to inform her about her inheritance and legal rights. #Operation Sindoor India-Pakistan Clash Live Updates| Pak moving troops to border areas? All that's happening Why India chose to abstain instead of 'No Vote' against IMF billion-dollar funding to Pakistan How Pak's jihadi general Munir became trapped in his own vice As with men, women's inheritance rights are governed by succession and personal laws if the deceased does not leave a will. As per the Hindu Succession Act , 1956 (for Hindus, Buddhists, Jains and Sikhs), the mother is classified as a Class I heir. 'This means that if a Hindu son dies intestate (without leaving a will), the mother is entitled to an equal share in his estate alongside the other surviving Class I heirs, if any,' said Raj Lakhotia, managing partner at professional services firm LABH & Associates. If an unmarried Hindu woman dies intestate, her mother is entitled to a share in her estate. 'Among Muslims, as per Sharia Law (subject to Sunni and Shia variations), mother is a primary heir and is entitled to a fixed share. If the deceased son has children (or grandchildren), she gets one-sixth share of the property, and if he has no kids (or grandkids), the mother's share increases to one-third of the estate,' said Neha Pathak, head of Trust & Estate Planning at Motilal Oswal Private Wealth. A Christian mother's right to inheritance is governed by the Indian Succession Act, 1925. 'If the deceased is survived by a spouse and children, the entire estate is divided among them. The mother does not automatically receive a share,' said Sneha Makhija, head of Wealth Planning at Sanctum Wealth. If there are no surviving spouse or kids, the mother can inherit a large portion of the estate. Among Parsis, the mother is entitled to a share of the estate under Section 51 of the Indian Succession Act, 1925. 'If the deceased leaves a spouse and children, each parent receives a share equal to half of each child. In the absence of a spouse or kids, the parents, individually or jointly, inherit the entire estate,' said Lakhotia. A woman's property is passed on to her heirs depending on whether she has made a will or not. If she has made a will, her property, whether self-acquired or inherited, will be distributed according to the terms of the will. She can bequeath it to anyone she chooses, including individuals outside the family. If she hasn't made a will, intestate succession laws apply, and these vary based on her religion. For Hindus, it is governed by the Hindu Succession Act, 1956, wherein the estate is passed on to the legal heirs in order of preference, with the first being husband, children and children of predeceased children. Then comes the legal heirs of her husband; followed by her mother and father, then the legal heirs of her father and, finally, the legal heirs of her mother. 'The Act also ensures that daughters have the same rights of inheritance as sons, regardless of their marital status,' said Rajat Dutta, founder & initiator at Inheritance Needs Services. For Muslims, the devolution is governed by the Muslim Personal Law (Shariat) Application Act, 1937, wherein legal heirs are divided into sharers and residuaries. While sharers get the first share, residuaries get the remaining portion. If she inherits property from a relative, be it husband, son or parent, she is the absolute owner and can dispose of at will. If she makes a will, she can't give away more than one-third of the property, and if the husband is the only heir, she can give two-thirds of her share.
Hindustan Times
04-05-2025
- Business
- Hindustan Times
Supreme Court reaffirms that property shares become self-acquired after a joint family split, granting the right to sell
The Supreme Court has reaffirmed that after the partition of joint family property, the shares allotted to each member become their self-acquired property. The individual holding such property has the right to sell, transfer, or bequeath it as desired. What this order means is that a property acquired by a member of a joint Hindu family after the severance of status is considered self-acquired property that means that the individual now has full control and ownership over that property. If a family member chooses to sell their individual share, they have the legal right to do so as they would with any self-acquired property. In practical terms, if the property has been partitioned and the individual share is clearly defined and separated, the person can sell, transfer, or otherwise dispose of that share without needing approval from other family members, since it's now their self-acquired property. This also means they can decide how to handle the property—whether to sell it, gift it, or pass it on through a will—according to their own wishes. However, if the family hasn't formally partitioned the property, selling an individual share may still require agreement from other coparceners, depending on the legal status of the property and local laws regarding partition, said legal experts. 'After the joint family property has been distributed in accordance with law, it ceases to be joint family properties and the shares of the respective parties become their self acquired properties,' the court said in its recent order. A bench of Justice JB Pardiwala and Justice R Mahadevan held recently that after a partition, each party receives a separate and distinct share which becomes their self-acquired property with absolute rights to sell, transfer, or bequeath. The Supreme Court held this in the case of Angadi Chandranna v. Shankar & Ors. (2025). A Joint Hindu Family (JHF) is a family unit where the property is owned collectively by all its members, typically governed under the Hindu Undivided Family (HUF) system. In this system, male descendants acquire a birthright in the family property, with up to three generations inheriting this right. Under traditional Hindu law, no coparcener (a member with a birthright) can claim a specific portion of the joint family property until a formal partition takes place, as each member holds an undivided interest in the entire property. Following the 2005 amendment to the Hindu Succession Act, daughters now have the same birthright as sons in joint family property, ensuring equal inheritance rights. In contrast, self-acquired property refers to property that an individual acquires through their own efforts, without utilizing any joint family resources or ancestral assets. This type of property may be obtained through personal income, individual enterprise, or personal skill, without relying on the family's ancestral wealth. The owner of self-acquired property has complete control over it, including the right to sell, mortgage, gift, or bequeath it, without needing the consent of other family members. A joint Hindu family property is the property in which each member of the joint Hindu family has an inherent title and share irrespective of who acquires it. Partition of joint Hindu family confers severance of status of jointness and the united identity of the family is dissolved. 'Upon such partition the jointly held ownership of the properties belonging to the joint Hindu family transforms into separate ownership. After partition each member/coparcener gets the separate and distinct share which becomes his/her self-acquired property,' explains Sunil Tyagi, Managing Partner, ZEUS Law Associates. This recent judgment of the Supreme Court in the matter of 'Angadi Chandranna v. Shankar & Ors.' once again affirms the settled position regarding property rights of the coparcener after partition of the joint Hindu family. This judgment reiterates that any property acquired by a member of joint Hindu family post severance of status of joint Hindu family is his self-acquired property. A person who acquires such property has a right to sell, transfer or bequeath such self-acquired property in the manner he deems fit, he said. This decision of the Supreme Court clarifies that a clear intention to waive separate rights must be established if such self-acquired property is to be considered once again as the joint Hindu family property, he said. He also points out that a voluntary action by the owner of the property to include such self-acquired property into joint Hindu family hot potch, with intention of abandoning his separate rights therein must be established for it to qualify again as a joint Hindu family property.
