Finance, Forex and Investments

Joint Family and Individual Incomes?

How does one differentiate between an Individual Income / Property from Joint Family Income / Property and keep them separated? This question is Not from Tax point of view but from Ownership point of view. In our family like many other joint families every thing relating to male members is treated as joint income / property even if they are in individual name. The joint income even includes the salary of an individual family member (even if he is earning due to his own professional capability), income from business, income like gifts given to individual and all other sort of income. Also all the properties and business are treated as joint even if the person owns that in his individual name and own it using his individual income (salary, etc. as mentioned above). This is irrespective of the fact that any contribution was done by the family or not to generate such income or own such property / business. Even the female members’ income whether in form of salary or professional services (which she is earning due to her own professional capability like an engineer), in form of business done by her, etc. is treated as joint. All income except for the gift given by her parents’ side is treated as Joint. I suppose the above scenario is not supported by any of the Indian laws (HUF or any other). Also, such informal family rule is unacceptable if the members of the family do not work and live in harmony, are not united in good and bad times and do not contribute towards generating such income / owning such property. Hence I need to know (from both a Male and a Female Member perspective) – 1.Whether the aforesaid rules of family supported by Indian Laws or are against Indian laws? 2.How does one differentiate between a Joint Family Income / Property from Individual Income / Property in such scenario? 3.Out of the following which all are Individual Income and which can be treated as Joint – a.Salary (if it withdrawn from a company owned by members of family in individual name / huf name) b.Salary (from any other company) c.Professional Fees / Freelancing Income d.Gifts received by relatives - on marriage and on other occasions 4.How can one start his Independent Business / own his Independent property in such scenario – a.Keeping the shares / property in his individual name b.Arranging the capital / money from Loan in individual name c.Arranging the capital / money from Individual Income (as asked in point 3 above) 5.If the expenses of the family are together can such Independent Income / Property be treated as Joint? In other words, can an Independent Income / Property (as asked in point 3 above) exists even if the expenses are together or do we need to separate / have clear records of the expenses to treat it as Independent even if they are family expenses and not the business expenses ? 6.Can such Independent Income / Property be claimed under any Family Dispute / Family Arrangement / HUF Partition / Otherwise ? 7.Should a letter of intent / communication be given for making the clarity of Independent Income / Property or is it deemed to be clear. If it has to be given, then should it be given to karta / coparceners of all the HUF which the person is a member ?

Public Comments

1. There are five heads of income: 1. "Salary" 2. Profits from business or profession 3. Income from house property 4. Capital gains 5. Income from other sources Since the HUF is a separate entity, it can earn income from all the above except “Income from Salary”. All income that arises on the investment of the HUF's funds and utilization of its assets is regarded as HUF Income and is separately assessed and taxed. HMT