Introducing online HUF account opening
Opening an HUF account hasn’t always been the easiest process. It usually involved filling out physical forms, sending documents by courier, and waiting 5–7 business days for the account to be activated.
HUF (Hindu Undivided Family) accounts at Zerodha can now be opened entirely online, with most accounts activated within a day. We’ve also removed the account opening charges for online HUF accounts.
If your family already has an HUF, or you’re considering setting one up, here’s what you need to know.
What is an HUF?
A Hindu Undivided Family (HUF) is a distinct legal entity recognised under the Income Tax Act. It is separate from its individual members and has its own PAN, files its own tax returns, and can hold assets and investments in its own name.
An HUF is governed by Hindu law and is available to Hindu, Jain, Sikh, and Buddhist families.
In principle, an HUF comes into existence automatically when a family has at least two members. In practice, however, a HUF deed is usually created to formally document the structure, after which a PAN is obtained in the HUF’s name. This allows the HUF to open bank accounts, hold investments, and file taxes.
Why does it matter for tax planning?
Because an HUF is treated as a separate taxpayer, it gets its own tax slab, deductions, and exemptions, in addition to what individual family members claim in their personal returns.
Some examples:
- Separate basic exemption limit: ₹2.5 lakh under the old tax regime and ₹4 lakh under the new regime (FY 2025–26).
- Deductions under Section 80C: Investments made in the HUF’s name. such as ELSS, PPF, or life insurance, can qualify for deductions up to ₹1.5 lakh.
- Section 80D deductions: Health insurance premiums paid for HUF members may be eligible.
- Capital gains exemptions: Sections 54, 54F, and 54EC can apply when long-term gains are reinvested.
- Income separation: Income from HUF-owned assets, such as rental income, investments, or ancestral property, is taxed in the HUF’s hands rather than being added to an individual’s income.
One important point to keep in mind is that assets transferred by members to the HUF can sometimes trigger clubbing provisions, so HUF structures are usually most useful when the assets originate within the HUF itself, such as ancestral property or family business income.
What’s changed at Zerodha
You can open a Hindu Undivided Family (HUF) account at Zerodha entirely online.
There are no physical forms, no couriered documents, and no branch visits. Verification and document signing happen online, and the account is typically activated within a day.
How to open an HUF account at Zerodha
To open an HUF account, you’ll need:
- The HUF PAN
- Karta’s PAN and Aadhaar
- An HUF bank account
- Documents of the Karta and coparceners
The entire process can be completed online at: zerodha.com/open-account/huf/
If the Karta’s Aadhaar isn’t linked to their mobile number, or if the Karta is an NRI, the HUF account can be opened offline.
If you don’t already have an HUF set up, you’ll first need to create an HUF deed and apply for a PAN in the HUF’s name. Once that is done, the Zerodha account opening process is fully online. You can watch this video for a walkthrough:
If you’re unsure whether setting up an HUF makes sense for your family’s situation, it may be worth discussing it with a chartered accountant, especially if your family has ancestral property, rental income, or a jointly run business.
We’ve partnered with Quicko to help with this. You can explore it here.
