Are my sister's children members of my father’s HUF?

Today's Q&A explains such details in response to a query by a reader.

After the death of a karta the eldest coparcener becomes karta of the HUF by default unless he or she is unwilling or incapable of becoming the karta. Since four generations of descendants of a common male ancestor constitute members of the HUF, your son, his wife and daughter are members of your father’s HUF. Even your grandchildren, if any, are also member of your father’s HUF. However, the son and daughter of your sister do not become member of your father’s HUF on birth as your father is not the common male ancestor for them.

On partition of an HUF the assets are distributed equally per stripe i.e. per branch and then equally amongst the members of the branch. Please note that the share of assets of the HUF distributed to your sister will become her individual property whereas you will have to distribute the same amongst yourself, wife, son and daughter equally unless all the members agree otherwise.

On partition it is not necessary for the distribution of the assets to be equal among all the members and it can be uneven provided all the members agree to such distribution. All the assets of the HUF can be given to a single member to the exclusion of all the other members subject of consent of all the members entitled to get share. So your sister may relinquish her shares in the assets of your father’s HUF through a partition deed.

Please note that the income tax law does not recognise partial partition and therefore you will have to distribute all the assets under the full partition deed. The partition needs to be recognised by the income tax department for which you will have to file an application with the jurisdictional income tax authority requesting them to pass an order taking on record the full partition of the HUF.