How to Apply For a HUF PAN Card: Process & Documents Required

A Hindu Undivided Family, commonly known as HUF, is a unique taxation entity in India that offers a strategic way to save taxes by pooling family assets. Beyond Hindus, people of other religions like Buddhists, Jains, and Sikhs can also create HUFs. HUFs are taxed separately from their members, allowing for tax optimisation.

In this article, we will explore the process of applying for a HUF PAN card and the benefits of this financial structure.

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What is HUF PAN Card?

A HUF PAN Card serves as a unique identification for Hindu Undivided Families (HUFs) in India, primarily used for taxation purposes. This specialised PAN Card is exclusively issued to Karta, who is the head of the HUF. It's crucial to understand that only Karta has the authority to apply for and hold a HUF PAN Card.

This card helps the HUF separate its financial identity from its individual members, helping in efficient tax management and compliance within the HUF structure, which often includes multiple generations of a family pooling their assets and income for joint financial purposes.

How to Apply For a HUF PAN Card?

You can apply for a HUF PAN card online or offline. Here are both procedures:

Online Application Process for Applying HUF PAN Card

To apply for a HUF PAN Card online, follow these steps:

Step 1: Visit PAN Card Apply Online website

Step 2: Choose 'Business PAN Card

Step 3: Complete the online form with the necessary details

Step 4: Submit the form

Step 5: Pay the processing fee

Step 6: Send the required documents for verification

Step 7: Wait for document verification

Step 8: Once verified, your HUF PAN Card request will be processed

Step 9: The new PAN Card will be sent to you

Offline Application Process for Applying HUF PAN Card

Applying for a HUF PAN Card offline involves these key steps:

Step 1: Locate a nearby authorised PAN Application Centre

Step 2: Collect Form 49A, the PAN Card application form

Step 3: Fill in the form accurately, including HUF and Karta details

Step 4: Attach required documents, like proof of identity and address, and HUF's existence proof

Step 5: Apply along with the processing fee payment

Step 6: Obtain an acknowledgement receipt with a unique 15-digit number

Step 7: Wait for document verification by the centre

Step 8: Once verified, the Income Tax Department processes the request

Receive the new HUF PAN Card at the provided address

What Are The Documents Required For Applying For a HUF PAN Card?

When applying for a HUF PAN Card, it is essential to provide a specific set of documents to establish the identity and structure of the HUF. The required documents typically include:

Photo Identity Proof: This serves as identification for the head of the family (Karta) and can be one of the following: Aadhaar Card, Driving License, Passport, or any other government-issued photo ID.
Address Proof: To verify the residential address of the Karta, you can submit documents like an Aadhaar Card (with an updated address), Passport, Electricity Bill (not older than 3 months), Bank Statement (not older than 3 months), Rental Agreement, or Voter ID Card.
Date of Birth Proof: To confirm Karta's date of birth, acceptable documents include an Aadhaar Card, Driving License, Passport, School Leaving Certificate, or Birth Certificate.
Affidavit by the Karta: The Karta of the HUF must provide an affidavit stating the names, father's names, and addresses of all the coparceners (members) within the HUF. This affidavit helps in establishing the HUF's composition and structure.
Other Supporting Documents: Depending on specific situations or requirements, additional documents may be requested by the authorities. It is crucial to review the official guidelines and requirements during the application process to ensure compliance.

How Much Does It Cost To Apply For a HUF PAN Card?

To apply for a HUF PAN card, the charges vary based on the communication address. For Indian communication addresses, the application fee is ₹93 (excluding Goods and Services Tax), while for foreign communication addresses, it is ₹864 (excluding GST).

Payment options for the PAN application include:

Credit/debit card
Demand draft
Net-banking

Once the application fee is paid, the next step is to send the supporting documents via courier or post to Protean (formerly NSDL eGov) or UTITSL. Only after receiving the documents will the PAN application be processed. It is essential to choose a suitable payment method and ensure all necessary documents are submitted for a smooth application process.

What Benefits Can You Get By Obtaining A HUF PAN Card?

Having a HUF PAN card brings many financial advantages, unlocking a range of tax benefits. Here is a list of the benefits:

Income Tax Benefits: HUF is a distinct legal entity with its PAN card. It enjoys a basic tax exemption of ₹2.5 lakh, meaning that by forming a HUF with family members, you can collectively avail of an additional exemption of ₹2.5 lakhs per annum.
Property Ownership: Unlike individual property owners who face tax implications on multiple self-occupied properties, HUFs can own residential houses without incurring tax on notional rent. They can also benefit from tax deductions of up to ₹1.5 lakh on home loan repayments and up to ₹2 lakh on interest under Section 80C of the Income Tax Act.
Investment Possibilities: HUFs can invest in tax-saving Fixed Deposits and Equity Linked Savings Schemes (ELSS) to earn tax benefits of up to ₹ 1.5 lakh under Section 80C. While they cannot open PPF accounts, they can claim tax deductions for the amounts deposited in individual PPF accounts of their members.
Health Insurance Benefits: HUFs provide substantial tax relief when it comes to Health Insurance premiums. You can claim a deduction of ₹25,000 per year under Section 80D. If a family member is a senior citizen, this limit increases to ₹50,000. This helps in securing comprehensive health coverage for your family without straining your finances.

Hopefully, you understood the process of applying for a HUF PAN card and how it can benefit your family. However, it is important to understand that tax implications persist unless a partition occurs. When a member creates a new HUF with family, income from the transferred property falls under the new HUF's taxation.

FAQs about HUF PAN Card

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Who is the Karta in an HUF?

The Karta is typically the eldest male member of the family. Upon Karta's selection, all family members become HUF members. Male members are called coparceners, while females are referred to as members. Coparceners have the right to request a HUF partition, but this right is generally not extended to female members.

Who Are the Legal Heirs of HUF?

Under the Hindu Succession Act of 1956, individuals born in a HUF are considered coparceners by birth. Coparceners have legal rights to ancestral property, with succession rights extending up to four generations in a lineal descending manner.

How Can an HUF Earn Income?

A HUF can generate income through various legitimate means, including business activities, real estate investments, and market-linked investments like shares, rental income, and more. However, it cannot earn income through salaries. The HUF is required to file Income Tax Returns (ITR), and the earned income is taxed according to the applicable tax slabs.