Sunday, 23 June 2013

Demat transmission in Hindu Undivided Family (HUF )

In a Hindu Undivided Family (HUF), the seniormost surviving member becomes the karta on the death of the existing karta . The transmission formalities need to be initiated by the surviving members of the HUF in order to effect the transfer of securities from the demat account of the deceased karta to the new karta, or members accounts, as the case may be.

Form


The surviving members of the HUF need to fill a transmission form. The details of securities held by the deceased karta on behalf of the HUF have to be listed in the form, along with the ISIN. The detials of the depository participant's account, to which these securities are to be transferred, must also be mentioned.


Documents


For securities less than Rs 10 Lakh, the original or notarised copy of death certificate, an indemnity bond on a Rs200 non-judicial stamp paper, a notarised affidavit and verification on a Rs100 non-judicial stamp paper, and declaration of the new karta must be submitted. For securities over Rs10 lakh, the court decree and deed of partition must be submitted along with the original or notarised copy of the death certificate.


Separation of HUF


If on the death of the karta, the HUF faces a separation or partition, a certified true copy of the settlement deed/deed of partition/decree of the relevant court, duly stamped for dealing in securities in the beneficiary owner's account, held by the deceased karta, needs to be provided. Scrutiny & transfer After the mandatory scrutiny of the information, the necessary transfer of securities to the beneficiary accounts and changes in the records are carried out.


Points to note


After the amendment to the Hindu Succession Act in 2005, if the senior-most member, after the karta's death, is a daughter, she will become the karta of the HUF.


However, the karta's widow is not a co-parcener in his HUF and cannot become the karta.


(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.)





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