How to open HUF Bank Account

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How to open HUF Bank Account

As you all know Hindu Undivided Family is considered as a separate person under the Income Tax Act.  HUF cannot use the bank account of its members (Karta and co-parceners)  for transacting any business in its name. HUF is not a real person who can sign for itself so a rubber stamp in the name of HUF with the signing authority of Karta is a must-have.

Once a permanent account number is allotted to HUF, then the step forward would be to make a rubber stamp and open a bank account.

Rubber stamp

A rectangular shape rubber stamp needs to be made. It is a mandatory requirement for HUF to have a rubber stamp before entering into any transactions on behalf of HUF.

Note: As per the RBI circular, round stamps are not allowed/accepted for HUFs.

Specimen for a rubber stamp for HUF

Bank Account

Opening a bank account in the name of HUF is a must. HUF can open a bank account in a private or nationalized/public sector bank.  There is no restriction on what type of bank account a HUF can open and operate. HUF can open either a saving account or a current account. Apart from these, HUF can also open a Demat account and a  public provident fund account, etc.

Details/documents required for opening a HUF bank account

All the documents shall be duly stamped and self-attested  for opening a bank account

⇒ A copy of the PAN card in the name of HUF

⇒ A copy of the PAN card of Karta/authorized signatory

⇒ Passport size photographs of the Karta/authorized signatory

⇒ Proof of Identity of the Karta/authorized signatory (e.g. PAN, Passport, Aadhar, driving license, voter’s ID card, etc)

⇒ Proof of address of the Karta/authorized signatory (e.g. Passport, Aadhar, driving license, voter’s ID card, electricity bill, etc)

⇒ Details such as the mobile number/phone number/ e-mail address of the Karta/authorized signatory are taken.

⇒ A declaration which states that Karta/authorized signatory will open and operate the bank account. This declaration will be signed by Karta and two or more major co-parceners of HUF. Generally, this declaration is included in the account opening form only by the banks.

The documentary requirements for opening a bank account may differ from bank to bank. But for most of the banks, the above list of documents should suffice the purpose.

Note: In most cases, banks do not permit any nomination to be added to a bank account of a HUF. Hence, it is advisable to have more than one signatory for operating the bank account.

 

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About CA Ankita Khetan 162 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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