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Residential Status of Hindu Undivided Family (HUF)

HUF is a short form of Hindu Undivided Family. HUF is under in categories of persons under income tax act. The main motive to create HUF is taxed separately from its members. A Hindu family comes together and forms a HUF. HUF is not only for Hindu, even the Jain, Buddhist, Sikh can also form a HUF.
A HUF is taxed separately, therefore deductions under section 80 and exemption allowed under the tax law can claim separately.
So before calculating tax of HUF, the most important step is to know the residential status of HUF.

Residential Status of HUF

      The residential status of persons other than the individual is based on the place. The HUF is said to be resident if the control and management of its affairs are wholly or partly in India.


A HUF is said to be resident

 If the control and management of its affairs are situated wholly or partly in India.

A HUF is said to be Non-Resident
If the control and management of its affairs are situated wholly outside of India.

Resident but ordinarly residents/ Residents but not ordinarly residents.

The residential status of Karta helps us to determine the residential status of HUF.

(Karta is head of Hindu undivided family (HUF), and he has the power to take all decisions under family. In Hindu Undivided Family the Karta play the important role. The residential status of Karta can easily determine the residential status of HUF.) then status of the Karta determines whether it is resident and ordinarily resident or resident but not ordinarily resident.

  • If the karta is resident and ordinarily resident, then the HUF is resident and ordinarily resident.
  • If the karta is resident but not ordinarily resident, then HUF is resident but not ordinarily resident.

Additional conditions for Karta, for determining the residential status of HUF.

  • Karta has been Resident in India in at least 2 out of 10 previous years immediately preceding the relevant previous years.
  • Karta has been present in India for a period of 730 days or more during 7 years immediately preceding the relevant previous years.

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