6 – Share in ‘HUF’ property

I can transfer my share in inherited or jointly acquired property, or make a will giving it to anyone. But can I transfer my share in ‘HUF’ or ‘ancestral’ or ‘copercenary’ property? There is a technical difference in these three concepts. But for the sake of simplicity and for our purposes, I use the three in the same sense. HUF means Hindu Undivided Family.

Before 1956

Long ago, I was a Hindu man belonging to the Mitakshara School that covered all areas in India except Bengal. I held property inherited from three male lineal ancestors before me in direct line. Now the property became ‘ancestral’ in my hands. When my son was born, this property became ‘coparcenery’ property. He got a right in it by birth. When my other son was born, he also got right in it by birth. My wife, my two sons and I then got equal share in this coparcenery property. My sons and I also had a right to ask for partition. Then I had one daughter. Daughters did not have a share or claim in this property. Hence my daughter did not get any share.

Coparcenery property includes property purchased or earned using coparcenery property, and the separate property which my sons or I decide to include into it. We usually call this ‘HUF’ property. It includes business run by an ‘HUF’

In the example I gave, my wife, my two sons and I had each one-fourth share. After me, my share extinguished, and the shares of the other three increased.

This was the general position before 1956.

From 1956

The Hindu Succession Act 1956 made changes. Now, I could make a will giving my one-fourth share in this ‘HUF’ property to anyone. If there was no will, my share would not fall back to the three as mentioned above, but went by succession to my wife, two sons and daughter in equal shares; hence their shares in this property would be as follows:
my wife – 1/4 (own share) + 1/16 (inherited from my share) = 5/16,
my two sons – 1/4 (own share) + 1/16 (inherited from my share) = 5/16 each,
my daughter – 1/16 (inherited from my share).

From 2005

The law changed in 2005. From 9 September 2005, my daughter (whether unmarried, married, divorced or widowed) would also get a share in the ‘HUF’ property as if she were a son. Thus, if I hold ‘HUF’ property, and I have a wife, two sons and a daughter, we all will have 1/5th share each in the ‘HUF’ property.

The most important thing is that I can transfer, or give by will, my share in the ‘HUF’ property to anyone. So can the others.

This is an over-simplified statement of the legal position. The law relating to ‘HUF’ properties is detailed and complex, and has consequences affecting tax liability.

– Nilima Bhadbhade
https://in.linkedin.com/in/nilima-bhadbhade

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