Whether account under HUF Continue After Death of Karta – The answer is ‘Yes’, Karta (Manager) of HUF is the sole authority over HUF account and authorized to do all the transactions on behalf of HUF account. After the death of Karta, it is necessary to appoint a new Karta to allow operation in the same account.
Only a coparcener can become Karta of a HUF. By virtue of the Hindu Succession (Amendment) Act 2005, daughters can also become coparceners and have interest by birth in coparcenary property similar to sons.
On the death of the Karta, the HUF account will be continued until the partition if any. Next elder male/female member will become the new Karta of respective HUF. It is not mandatory to dissolve the HUF account on the death of Karta of the family. HUF is dissolved only on the partition of property between the members.
It is also to be noted that partly partition of HUF is not approved under this ACT, Partition means full partition.
Next member in the HUF may continue the bank account subject to submission of declaration cum no objection letter to the bank from the new Karta and co-parceners .
The list of documents to be submitted to claim the bank authorization :
- Request to delete the name of deceased Karta from bank’s record (type and account number to be specified) with the copy of death certificate.
- Details and KYC proof of newly appointed Karta to be mentioned and his relationship with the deceased Karta.
- Request to register update the name of new Karta of the specified HUF account in place of deceased Karta and allow him to operate the said HUF account.
- No objection for appointment of (Name of the member) new Karta of HUF account
- The declaration cum no objection letter from co-parceners for deletion of name of existing Karta and appointment of New Karta to be signed by the new Karta and all the major co-parceners of the family.
- Bank’s as per their policy guidelines may obtain affidavit cum indemnity from surviving members and legal heirs with two guarantors confirming their acceptance to one of the members as a new Karta.
- Banks shall allow the new Karta to continue to operate the existing account on the basis of such documents, in HUF accounts.
- A similar procedure to be followed in cases where an account is to be closed and balance in the account to be paid to the new Karta.
The Karta is traditionally the senior most male coparcener of the HUF. When Karta of the HUF dies, the next senior male member takes over as Karta. If the senior most member gives up his right, a junior coparcener can become Karta of the HUF, with the consent of all other major co-parceners as held by Supreme Court in Narendra Kumar J. Modi Vs CIT (1976) 105 ITR 109 (SC).
As per Hindu Succession (Amendment) Act, 2005 the daughters of a family who are governed by Mitakshara Law, also become co-parceners in the HUF property. The above amendment further gave the women the right of survivor ship via amended Section 6 (1) (a) and (b) of Hindu Succession Act, 1956. This amendment gave them equal rights as the sons.