If somebody transfers his own assets for forming Hindu Undivided Family (HUF) after 31.12.1969, it is not acceptable and the income from such assets will be taxed in the hands of such individual transferring the assets that means the status is not treated as HUF.

However, in the following situations the status can be treated as HUF and accordingly separate assessment can take place –

If the income is generated from the ancestral assets (earlier belonging to the forefathers of the individual) or by investing the sale proceeds of such ancestral assets.

• If the income is earned from the assets received by a married individual, on partition of a bigger HUF i.e., the HUF of father or grandfather.

If the income is received from investing the money received as gift collectively in favour of the members of a HUF from any relative or any person other than the Karta or any member of such HUF.

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