Karta

In Hindu Undivided Family (HUF) law, the Karta is the head of the HUF who manages and controls the family’s assets, finances, and business affairs. The Karta acts as the legal representative of the HUF in all matters, including financial transactions, legal disputes, and taxation.

Key Features:

Role and Authority: The Karta has full control over HUF property and makes decisions for the welfare of the family. Can buy, sell, or mortgage assets, settle debts, and conduct business on behalf of the HUF. Has the fiduciary responsibility to act in the best interests of all family members.

Eligibility: Traditionally, the eldest male member of the HUF becomes the Karta. In modern interpretations, females can also be Karta under certain laws.

Powers and Limitations: The Karta can make ordinary and necessary transactions without consulting co-parceners. For extraordinary or unusual transactions, consent from other co-parceners may be required. The Karta cannot transfer HUF property for personal benefit outside the family.

Taxation Role: The Karta represents the HUF for income tax purposes, including filing ITR for HUF income. Responsible for paying taxes on income generated by HUF assets or business.

Succession: On the death of the current Karta, the next eldest member usually assumes the role. The HUF continues as a legal entity even after succession.

Example: Mr. Rajesh is the eldest male member of his HUF, consisting of himself, his wife, and two sons. As the Karta, he manages the HUF property, invests funds, and represents the HUF in all legal and financial matters, including paying taxes. Any profit from the family business is treated as HUF income, and the Karta is responsible for reporting it to the Income Tax Department.