Under Hindu Law, an HUF is a Family which consists of all persons lineally descended from a common ancestor and includes their wives and daughters.
Head of the family is called as “Karta” and other male members are called “coparceners”.
Even though Jain and Sikh families are not governed by the Hindu Law, but they are treated as HUF under the Income tax act, 1961.

Hindu Undivided Family (HUF) is treated as a ‘person’ under section 2(31) of the Income-tax Act, 1961.
HUF is a separate entity for the purpose of assessment under the Act.

The Taxability of any person in India depends upon the residential status of such a person in India during the particular financial year.

The Residential Status of a Hindu undivided family (HUF) is determined on the basis of Control and management of its affairs and it is computed for each and every year separately.

When the Control and management of the affairs of the HUF is wholly or partly situated in India.

When the Control and management of the affairs of the HUF is wholly situated outside India.

Karta should be a Resident in India for at least 2 years out of 10 years immediately preceding the previous year and he has been in India for 730 days or more during 7 years immediately preceding the previous year.
If Karta satisfies both of the above mentioned conditions, then the HUF is considered to be a Resident and Ordinary resident (ROR).
In other cases, the HUF is said to be a Resident but not-ordinary resident (RNOR).

Even when the Karta resides outside India, HUF will be considered as a resident if its affairs are controlled and managed in India.
Only for the purpose of classifying HUF as Resident and Ordinary resident or Resident but not-Ordinary resident, the residential status of Karta will be considered.

FAQ’s on Residential Status of HUF (Hindu undivided family)

Table of Contents