The Karta is traditionally the senior most male coparcener of the Hindu Undivided Family (HUF). He is the person who takes care of day to day expenses of the family looks after the family and protects the joint family properties. He remains to be Karta even if he becomes aged, infirm or ailing. Where a senior most member is not Karta, for any reason, the next senior male member takes over as Karta. [Man vs. Gaini ILR (1918) 40 All 77]. However, if the senior most member gives up his right, a junior coparcener can become Karta of the HUF, with the consent of all other members as held by Supreme Court in Narendra Kumar J. Modi Vs CIT (1976) 105 ITR 109 (SC).
Karta is a person who has the authority to manage the affairs and assets of HUF. The term HUF or Joint Hindu Family is not mentioned or defined in any act. However, the IT acts 1961 makes a HUF a taxable entity under section 2/31.
POWERS OF KARTA
- Karta is a person who has the authority to manage the affairs and assets of HUF.
- He controls the Joint family business & turn out to be the custodian of the finances.
- He has the power to enter in to contract, acknowledge debt and borrow money for & on behalf of HUF
- He has the power to spend money for the family and not liable to submit account to anybody.
- He has the power to make partition of the joint family property on his own.
- He has the power to gift away the movable properties of HUF within a reasonable limit for natural love & affection.
- He has the power to transfer immovable properties for religious purposes or for the benefit of the family.
- He has the power to enter into compromise settlement on behalf of HUF.
- He has the power to represent in suits on behalf of HUF.
- He can open and operate bank account/demat account on behalf of HUF.