My father had a Hindu Undivided Family (HUF) consisting of himself as karta, my mother, me and my elder sister, who is married. My father passed away last week. What is the status of the HUF? Is it necessary to distribute the assets of the HUF?
Death of a karta does not automatically bring an end to the HUF. It continues to exist even after the death of the karta, and the eldest of all the coparcener becomes the karta by default. So your elder married sister has become karta of the HUF by default.
If all the coparceners of the HUF agree and your sister agrees to it, you can become the karta of the HUF. So, it is not necessary for you to distribute the assets of the HUF.
On the death of a coparcener without making a Will or where he does not bequeath his share in the HUF assets, a partition of the HUF is deemed to have taken place just before death of the coparcener and his share in the HUF assets passes on to his legal heirs as per provisions of Hindu Succession Act, 1956. So in case your father did not make any Will in respect of his share in the HUF assets the same gets carved out of the HUF and is inherited by you, your mother and your sister equally. Even after this carving out you can continue with the HUF.
This carving out of the share of your father in the HUF assets is treated as partial partition under the income tax laws which is not recognised by the income tax laws. So, the income in respect of the carved out portion of the HUF assets will continue to be taxed in the hands of the HUF. As far as other coparceners are concerned, they continue to remain members of the HUF.
I have an HUF. I have taken a health insurance policy for myself and my wife, both of whom are senior citizens (aged over 60 years) for which I have paid a premium of Rs 35,000. I have also paid Rs 20,500 for a family floater health insurance policy bought for my son’s family. How much deduction can I claim on these policies?
Under the old tax regime, an individual can claim a deduction of Rs 25,000 under Section 80D of the Income-tax Act, 1961 for premium paid towards a health insurance policy for himself, spouse and dependent children. He/she can also claim an additional deduction of Rs 25,000 for premium paid to buy/renew health insurance policy for his/her parents. This deduction is available even if the parents are financially independent. Similarly, an HUF can also claim deduction for premium paid for any member of the HUF. In case the person for whom the premium is paid is a senior citizen, a higher deduction of Rs. 50,000 is available.
Since your son is financially not dependent on you, you cannot claim the deduction in respect of any health insurance premium paid for his family. However, as you have an HUF, you can instead pay the premium for your son’s family from the HUF’s account and claim deduction for Rs 20,500, as all the persons in your son’s family are members of your HUF.
If your son pays for his family as well as for both of you, he can claim a deduction of Rs 55,500 (35,000 + 20,500) under Section 80D of the Income-tax Act, 1961 in his income tax return (ITR).
The author is a tax and investment expert and can be reached on jainbalwant@gmail.com
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
