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.