Answered on April 22,2023
HUF abbreviation is Hindu Undivided family
HUF is a family which consists of all their family members. The family members can come together and form a HUF account. HUF has its own PAN. Under the HUF, family can save taxes and pool their assets.
The Term “Karta” is the representative of a HUF account or head of HUF account
Yes, Karta can sell HUF property, let me explain the procedure to sell the HUF property with real example
Mr. Manjunath, his wife, son and daughter came together to form a HUF account, the HUF account name is Manjunath HUF, Mr.Manjunath represented the account
On 19th July 2018, Manjunath HUF and Mr.Manjunath purchased a 3BHK flat in Bangalore, at a ratio of 75:25.
It's a joint purchase:
- Purchaser 1: Manjunath HUF purchased 75% of share
- Purchaser 2: Mr.Manjunath purchased 25% of share.
In the below sale deed, we highlighted purchaser 1 that is Manjunath HUF represented by its Karta Mr.Manjunath
On another page of same sale deed, we highlighted purchaser 2 Mr.Manjunath
Manjunath HUF and Mr.Manjunath obtained the property tax and they have been paying property tax regularly.
After 5 years of property purchase, Manjunath HUF and Mr.Manjunath need money to reinvest in new property purchases.
So, after 3 months of exploration in market, we found a buyer to purchase this property. The buyer's name is Ms. Manjula. She is an NRI and hails from Cumming GA, USA.
Ms.Manjula hired an advocate and verified the following documents
- Sale deed
- Tax receipt
- PAN of Manjunath HUF and Mr. Manjunath
- Address proof of Manjunath HUF and Mr.Manjunath
- Latest bank statement of HUF account (intention is to verify the account holder's name and address. HUF details should be at the header or footer of the bank statement. If not found, request a NOC from respective bank)
- Family tree certificate from Revenue department (from Thasildar)
Upon the verification and satisfaction of above documents, Ms. Manjula confirmed to proceed further.
Ms.Manjula agreed to buy the property at the price of Rs. 47 lakhs. Ms. Manjula is self-financing the purchase (without going home loan) so we decided to proceed sale deed directly (without sale agreement).
Ms. Manjula transferred the advance of Rs. 10 Lakh to seller from her ICICI Bank account by NEFT and made the demand draft (DD) of Rs. 37 lakhs for remaining payment, to be paid immediately after deed registration.
To register the sale deed, we followed below steps:
Step 1: Sale Deed Draft
- We drafted the sale deed. In the draft, we mentioned the transaction number of Rs. 10 lakh advance and DD number of remaining payment Rs. 37 lakh.
- The final draft was mutually approved by seller and buyer. we printed the sale deed draft on document paper for registration
Step 2: Government fee
Below is the break-up of government fee, % is based on the consideration of Rs.47 Lakh
- Stamp Duty: 5.1%
- Cess on Stamps: 0.5%
- Registration: 1%
- Scanning Rs. 700
- Affidavit Rs. 40
Ms.Manjula paid the government fee on Khajana-II website and generated below challan
Step 3: On the day of deed registration,
The sellers Manjunath HUF represented by its karta Mr.Manjunath and Mr.Manjunath carried following documents to sub-registrar office
- Sale deed
- Tax receipt (current financial year)
- Manjunath HUF PAN
- Mr.Manjunath PAN & Aadhaar
- Property keys
Buyer Ms. Manjula flew from USA to Bangalore 2 days ahead of registration and carried the following documents with her for registration
- Printed sale deed (to be registered)
- Overseas Citizenship of India (OCI)
- DD (remaining payment of Rs. 37 lakhs to be paid to sellers)
- Khajana -II Challan (shared the image above)
- A pen to sign the deed
Step 4: In the sub-registrar office
- The officer verified the above-listed documents and approved for registration
- Sellers Manjunath HUF Represented by its karta Mr.Manjunath and Mr.Manjunath gave the thumb impression and webcam photo. Buyer Ms. Manjula gave her thumb impression and webcam photo
- Sellers Manjunath HUF Represented by its karta Mr.Manjunath and Mr.Manjunath signed the sale deed. Buyer Ms.Manjula signed the sale deed
- Ms. Manjula collected the encumbrance certificate from registering officer and verified the registration
Below is the image of registered deed: