Women are now entitled to demand the partition of an HUF, fully or partially, for their share of property
A Hindu Undivided Family (HUF), which is treated as a separate taxable entity, can be handy in reducing taxes. Any married male who is a Hindu, Sikh, Jain or Buddhist can incorporate an HUF. It follows, then, that the role and rights of men in HUFs are very clear, but there are lingering doubts about the rights of women.
Unsurprisingly, the traditional HUF, which is based on the Hindu Succession Act of 1956, is male-centric. An amendment was made in 2005 to better recognise the role of women.
After interactions with legal and income tax experts, here’s a list of answers to common questions regarding the role of women in an HUF.
What were the issues in the original HUF?
There was no gender equality in the provisions of Section 6 of the Hindu Succession Act of 1956, which deals with HUFs. For example, while the Constitution allows women to claim a share of their father’s assets, HUFs did not allow them the right to inherit ancestral property. So, an amendment was made in 2005 to address the discrimination against female members.
What are the important changes?
The 2005 Amendment Act conferred rights on female members to become co-parceners directly. This means that women now have equal rights in the family property. But there is an exception. The amendment is governed by the Mithakshara law of inheritance and not applicable to Dayabhaga law of inheritance, says Premnath Rai, PRA Law Offices, Advocates, New Delhi. What it implies is that the change is not applicable in West Bengal and Assam where sons get property rights only after the father’s demise.
How can women get a share of property?
Women are now entitled to demand the partition of an HUF to get their share of property. The partition can be in full (HUF ceases to exist and all co-parceners take their shares) or partial (at least one member takes her share while others continue to be a part of the HUF).
If the daughter is married at the time of partition, the assets so received will be treated as her own personal assets.
In the case of a son, the assets can become the assets of his own HUF, notes CA Karan Batra, Founder-Chartered Club, an online website for chartered accountants.
Can an HUF give gifts to married daughters with the consent of all members?
Yes, a Karta can give reasonable gifts to married daughters. If the daughter is a member of an HUF, the gift is considered received by an individual and not the HUF she belongs to. The income would attract clubbing of income provisions in her hands, says Rai. What it means is that the income from the gift is deemed, for tax purposes, to accrue to the individual member and not the HUF.
What are the issues to consider when a woman attaches her wedding gifts or inheritance to her husband’s HUF?
When a woman receives immovable property as gifts, she becomes the absolute owner. It is entirely up to her to treat that property as her own or add it to her husband’s HUF. If she chooses to attach it to her husband’s HUF, the asset would not be regarded as her own but as that of the HUF. So, in case the HUF is partitioned, all the members would have a right to all the assets, including her gift or inheritance.
Can a woman be the Karta of an HUF?
The right to be the Karta is given to the senior-most male member of the HUF. So, on the death of the Karta, the position passes to the next senior-most male member in the family.
However, a woman can be a Karta after the demise of the male head under three situations, says Karan. The first is when the sons are minors and she acts as their guardian.
The second is when the male members are not in a position to act as Kartas and have given her permission to manage the family affairs. Third, when there are no male members in the family, she can be the Karta indefinitely.
In all other cases, the right to be Karta is not given to women, even after the 2005 amendment.
What happens in a family with only women, after the Karta is no more?
An HUF that has only female members can continue to exist and one of the female members will be the Karta.
So, if all the children are daughters, the HUF can continue with the mother as the head and daughters as co-parcerners. Also, a widow can induct a co-parcener into the family by adoption.