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Report mutual fund dividends as income from other sources in ITR Your Queries (Income Tax)
July, 21st 2021

It is not clear where we should show dividends from mutual funds (not capital gains) in ITR forms for AY 2021-22. Please clarify.
— S Natarajan
Income from dividends is classified as income from ‘Other Sources’, accordingly, for AY 2021-22, the same may be reported in ‘Schedule OS’, under head ‘gross income chargeable to tax at normal applicable rates’. Click on ‘add details’, specify the nature of income as ‘dividends, gross’ and enter the amount of income.

After the death of a karta, who is the next karta — eldest son or wife of the karta? (b) What process has to be followed to change the karta in bank deposits, demat accounts, etc? (c) Will the answer be different if an existing karta, still alive, is to be replaced by another member as a karta— Rajesh B Shah.

(a) On demise of the karta of an HUF, the next eldest surviving coparcener in the family automatically becomes the karta. A daughter can become a karta of the HUF if she is the senior most adult coparcener in the family. However, wife of deceased karta cannot become karta since she is not a coparcener to the HUF.

(b) In the event of death of a karta, a declaration from the members forming part of the HUF along with the death certificate of the deceased karta may be mandated by banks in order to give effect to the change of name of karta in the HUF’s bank account. You might be required to obtain affidavit cum indemnity from surviving members and legal heirs with two guarantors confirming their acceptance to one of the members as a new karta. Thereafter, banks shall allow the new karta to continue to operate the existing account. Pertinently, a similar procedure will have to be followed in cases where the account is to be closed and balance in the account is to be paid to the new karta.

Further, in order to transmit securities in the account of the new karta, a joint application coupled with a set of prescribed documents should be filed with the depository participant.

(c) The eldest adult coparcener (head of the family) of an HUF is known as the karta. An existing karta cannot be replaced by another member.

Further, there is no prescribed formal procedure for appointment of the karta in an HUF.

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