On the death of `B', the properties held by him as HUF devolved on to `A'. The family now consists of `A', his mother and two unmarried sisters.I understand that -
i) Although `A' is unmarried, properties devolved on him as co-parcener of his father's HUF will be held byhim as karta/trustee of an HUF.
ii) In as much as management of the above HUF is totally located in India, residential status of this HUF will be residential HUF for income tax purposes.
iii) A resident savings account can be opened in an Indian bank in the name of the karta to be operated by the PoA holder or jointly in the name of the karta and the PoA holder.
iv) The PoA holder can invest the income of the HUF properties in the name of the karta as resident HUF, just like any resident has the option to do so. In other words, the restrictions applicable to NRIs and persons of Indian origin will not be applicable.
--N R Chaddha, BARODA

The answers to all your four questions are in the affirmative. The HUF may consist of a single male with other females. It need not have at least two male members [Gowli Buddanna v CIT (1966) 60ITR293 (SC)].

The HUF can also enjoy the status of an NRI if its affairs are managed from abroad. Since the affairs of this HUF are managed by a nephew undera PoA, its status is that of a resident, though the karta is an NRI. Neither the restrictions (are there any?) nor the benefits (there are many) applicable to NRIs are not applicable to HUFs.

The savings account has to be in the name of the HUF and not in the individual name of the karta.

It appears that there was some partial partition of the HUF because of which `B' got a share on partition of his father's HUF when he was a student in India. Such partial partitions are not recognised by the ITA.

Unless the partition takes place, the income earned by the recipients, whether individuals or smaller HUFs, will be deemed to be that of the bigger HUF. This amendment to Sec. 171(9) has been effected from December 31, 1978.

In one of your articles on PPF, you have written that withdrawal can be made after the seventh year of opening the account, but later on you have added only five years in the year of opening the account to withdraw. This is a bit confusing. Kindly let me know in a more clearmanner.
-- Sidarth, sidarth@nde.vsnl.net.in

Wonderland of mathematics is indeed enchanting. Suppose you have opened a PPF account in 1990-91. Add 5 to 91. You get 96. The first withdrawal can be effected on or after April 1, 1996. The period from April 1, 1996, to March 31, 1997, is the seventh year. This is the reason why the PPF rule states, ``any time after the expiry of five years from the end of the year in which the initial subscription was made....''

My sister expired on January 7, 1999, leaving behind a trust. She had a policy -- Jeevan Dhara -- of Rs 50,000 from 1992. After paying the premium for a number of years, she used to get Rs 503 per month till her demise. According to that policy, I am entitled to get a) Rs 50,000, b) bonus, and c) interest. Inspite of reminders, personal visits and requests, I have not received the same. Please let me know under which Income Tax sections these amounts are exempt. I have to notify these in my returns of Income Tax before June 31,1999.
--B M Kurva, MUMBAI

I'm sorry to hear about your sister and the demise of her Jeevan Dhara policy. I hope LIC rejuvenates it in due course. All receipts from Jeevan Dhara are tax-free in your hands. You need not notify these in your tax returns unless you receive the money.

What is the difference between gift through will and gift in contemplation of death?
--Sunita Sutrave, MUMBAI

According to Sec. 191 of the Indian Succession Act, a gift can be made in contemplation of death where a person who is ill and expects to die shortly, delivers to another the possession of any movable property (not immovable) to keep as a gift in case the donor dies of that illness. Such a gift may be revoked by the donor if he recovers from the illness. The gift, through will, can be effected only after the death of the author of the will.