Huf & attachment
Jackie Agarwal
(Querist) 03 February 2014
This query is : Resolved
Hello
I would want to understand the concept of a HUF with respect to my current situation. I am currently stuck as a Director of a company which is facing bankruptcy.
However I want to know that if I transfer my assets to a HUF can they still be attached. For eg :my residence is in my name but I intend to open a HUF with myself being the Karta and transfer the residence to the HUF. Is this possible.
Devajyoti Barman
(Expert) 04 February 2014
Yes, this is possible. However if it is found that you have made the assets from the funds of company then the said assets can still be attached.
Jackie Agarwal
(Querist) 04 February 2014
No the residence was purchased by my parents in 2003 so there is no claim that it has been made by company money.
Can u plz guide me under which act and sections can i claim immunity.
T. Kalaiselvan, Advocate
(Expert) 05 February 2014
I shall reproduce the definition of HUF accounts:
Hindu Undivided Family (HUF):-
HUF is a family with husband, wife and children (and children’s spouses if any) living together. The property owned by this family will be through lineal ascendants or any ancestors. There are a set of laws that govern property ownership, marriages, taxation etc for a legally declared HUF.
Karta of a HUF is the senior most male member of the family and in financial terms he can also be called manager of the family. In this account a corpus is created where every family member can pool their income. The corpus will be handled by or authorized to handle by Karta (head of the family). Signature of karta will be required for every transaction from the bank. These accounts are similar to individual saving bank accounts; there will be various tax benefits that are available for an individual’s account while the income of members is being pooled in HUF account.
Every member of the family can deposit their income in the common corpus
Single person’s authority while participation from entire family
Corpus can be divided only on agreement of every coparcener of the family.
With the definition given above, I think that it is possible to transfer your residence to HUF.
R.V.RAO
(Expert) 06 February 2014
yes ,by transfer of your house ,you are creating HUF, if not already created.
the income from house property will be taxed in the hands of HUF.
company bankruptcy will not affect and touch or extend to your personal property, on transfer to HUF.
check if you extended any personal guarantees to repay the co's loans etc..
in whcih case,banks will recover their debts accordingly.
Jackie Agarwal
(Querist) 06 February 2014
Thank you Sir
I have not extended any personal guarantee. However I had signed bank documents that the my company used to secure the loan.
The property of another director was mortgaged and has already been acquired under sarfesi act.
You have been very kind in explaining the concept of HUF now can you please give me some examples of personal guarantee and how it can impact an individual.I am asking so as I am a guarantor in another loan taken which till god's grace is not defaulted yet.
