What are the key issues to be noted in preparation of a Hindu Undivided Family (HUF) Deed ?

The deed should be prepared on stamp paper declaring the formation of the Hindu Undivided Family (HUF). It should have all the details, including the name of Karta, co-parceners, address and source of funds in the corpus. Creating a HUF Deed is not mandatory. However, it is always beneficial to have a HUF Deed. Following are the key issues to be noted in preparation of a HUF Deed: A HUF deed is a written formal document on a stamp paper (as applicable in the respective State) specifying the name of Karta and Coparceners of HUF. The eldest male member of HUF becomes Karta of HUF. The name of members of HUF and the name of the HUF is also required to be stated in the HUF Deed at the time of creating of HUF. The name of HUF is usually the name of the Karta followed by the word HUF e.g., Ram Kumar HUF. HUF Deed also states the capital with which the HUF has been initiated. There are various sources through which capital can be introduced. A declaration is also provided by each member of family where they declare the name of Karta and also state that - Karta has the authority of the accounts vested in his hand; Karta holds the right to govern all the transactions of the HUF accounts on behalf of the members. Further, a rubber stamp of HUF will also be prepared. Rubber stamp should be Rectangular. Rubber Stamp will be affixed on all the documents pertaining of HUF to authorize the transaction. It is recommended that the Deed should be notarized. Register the Deed. Obtain PAN. Once the declaration deed is made, the karta should apply for a permanent account number (PAN) for the HUF. This is mandatory because all financial transactions must carry PAN. Open bank account. After the PAN is allotted, open a bank account in the name of the HUF. It is also advisable to get some stationery printed for official communication. The HUF is now functional. The Karta will have to invest in tax saving instruments and file tax returns on behalf of the HUF.