In the event of your demise, the distribution of assets in your Hindu Undivided Family (HUF) account among your children will depend on various factors. Here’s a detailed overview:
1. **Nature of HUF Property**:
– HUF is a distinct legal entity that can own property in its name. The property in the HUF does not belong to you absolutely but to all the members of the HUF.
2. **Rights of Coparceners**:
– With the amendment of Section 6 of the Hindu Succession Act in 2005, daughters are now treated as coparceners and have equal rights as sons in the HUF property.
– Upon partition of the HUF property, your married daughter will be entitled to an equal share along with your sons.
3. **Options for Distribution**:
– Your married daughter has the option to forgo her right in the HUF property.
– The distribution of shares in the HUF property can be equal among all coparceners or can be unequal with the consent of all coparceners.
4. **Succession of HUF Property**:
– After your demise, shares in the HUF property will pass on to legal heirs as per the order given in the Schedule of the Hindu Succession Act.
– Daughters and sons are treated as coparceners and have equal rights in the HUF property.
– Women entering the HUF upon marriage are called ‘Members’ and have different rights compared to coparceners.
5. **Continuation of HUF**:
– Your HUF can continue after your death, and your elder son can become the Karta of the HUF.
– The remaining property will continue to belong to the HUF even after your demise.
6. **Partition of HUF Property**:
– If you decide to partition the HUF property, a full partition must be made, and an order from the income tax officer recording such partition is required.
– Partial partitions are not recognized under income tax laws.
– Assets received on partition are not treated as income and are exempt under Section 10 of the Income Tax Act.
