We have a HUF where my father was the Karta. My father passed away recently. Me and my elder brother are coparceners. If my brother and I are not willing to be the Karta of the HUF, can our mother be appointed as the Karta of the HUF? There is a property in the name of HUF. Can you suggest any way to dissolve HUF?
After the death of the Karta of a HUF, generally the senior most coparcener becomes the Karta of the HUF. Under Hindu law only a coparcener can become a Karta of HUF. Though your mother is a member of the HUF, she cannot become a Karta of the HUF as she is not a coparcener. Only those persons who are born or adopted are considered coparceners. If both you and your brother are not willing to be appointed as the Karta of the HUF after the death of your father, then any elder child of you or your brother can also be appointed as the Karta of the HUF with the consent of all the members May go.
As far as dissolution of HUF is concerned, you can either sell the property and distribute the proceeds among all the eligible members and do a complete partition of the HUF. If you are not willing to sell the property, you can partition the property among the eligible members to effect a complete partition of the HUF. Please note that partial partition is not recognized under income tax laws, so you will have to partition/distribute all movable and immovable assets. The distribution need not be equal and may be unequal if all the members agree. Once a complete partition has taken place, you will have to make an application to your Assessing Officer to pass an order recording the fact that the complete partition has taken place.
(Balwant Jain is a tax and investment expert and can be reached on his Twitter handles jainbalwant@gmail.com and @jainbalwant)
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