Section 315 · Special persons
Section 315 of the Income-tax Act, 2025 — Assessment After Partition of a Hindu Undivided Family (HUF)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XVII
📜 What the law says — Section 315, Income-tax Act 2025
315. (1) A Hindu family, hitherto assessed as undivided, shall be deemed for the
purposes of this Act to continue to be a Hindu undivided family, except where
and in so far as a finding of partition has been given under this section in respect
of the Hindu undivided family.
(2) Where, at the time of making an assessment under section 270 or section 271, it
is claimed by or on behalf of any member of a Hindu family assessed as undivided
that a partition, whether total or partial, has taken place among the members of
such family, the Assessing Officer shall make an inquiry thereinto after giving notice
of the inquiry to all the members of the family.
(3) On the completion of the inquiry, the Assessing Officer shall record a finding as
to whether there has been a total or partial partition of the joint family property,
and, if there has been such a partition, the date on which it has taken place.
(4) Where a finding of total or partial partition has been recorded by the Assessing
Officer under this section, and the partition took place during the tax year,—
(a) the total income of the joint family in respect of the period up to the date
of partition shall be assessed as if no partition had taken place; and
(b) each member or group of members shall, in addition to any tax for which
he or it may be separately liable and irrespective of anything contained
against Schedule III (Table: Sl. No. 1), be jointly and severally liable for
the tax on the income so assessed.
(5) Where a finding of total or partial partition has been recorded by the Assessing
Officer under this section, and the partition took place after the expiry of the tax
year, the total income of the tax year of the joint family shall be assessed as if no
partition had taken place, and the provisions of sub-section (4)(b), shall so far as
may be, apply to the case.
(6) Irrespective of anything contained in this section, if the Assessing Officer finds
after completion of the assessment of a Hindu undivided family that the family has
already effected a partition, whether total or partial, the Assessing Officer shall pro-
ceed to recover the tax from every person who was a member of the family before
the partition, and every such person shall be jointly and severally liable for the tax
on the income so assessed.
(7) The provisions of this section shall, so far as may be, apply in relation to the levy
and collection of any penalty, interest,
In plain language
What Section 315 is about
Section 315 of the Income-tax Act, 2025 lays down how the Income Tax Department taxes a Hindu Undivided Family (HUF) when the family splits up (partitions). Its central idea is protective of revenue: once a family has been assessed as an HUF, the tax law keeps treating it as an undivided family for tax purposes until the Assessing Officer (AO) formally records a "finding of partition". A family cannot simply announce it has divided and walk away from the HUF's past tax dues. Section 315 is the direct successor to Section 171 of the Income-tax Act, 1961, and the two are almost identical in substance — the 2025 version is just cleaner, better organised drafting.
Who it applies to
- Any HUF that has been assessed (or is being assessed) as an undivided family under the Act.
- The individual coparceners/members (e.g., karta, sons, and, after modern law, daughters) who receive property on partition — they inherit liability.
- It is triggered whenever a member claims, during assessment, that the family has partitioned — wholly or partly.
The core rule: "deemed to continue as HUF"
Under Section 315(1), a Hindu family already assessed as undivided is deemed to continue as an HUF for all purposes of the Act — except to the extent the AO has recorded a partition finding under this very section. In plain terms: no order recognising partition = the family is still an HUF in the eyes of tax law, even if the members have privately divided assets.
How a partition is examined and recorded
- Claim during assessment [315(2)]: If, while an assessment is being made (under Section 270 or 271), any member claims a total or partial partition took place, the AO must hold an inquiry after giving notice to all members.
- Finding [315(3)]: The AO records whether partition happened and the date on which it took place.
How income is taxed when partition happens
- Partition during the tax year [315(4)]: The family's income up to the date of partition is assessed as if no partition had occurred, and every member is jointly and severally liable for the tax on it.
- Partition after the tax year ends [315(5)]: The whole year's income is assessed as HUF income, again with joint and several liability of all members.
- Partition discovered after assessment [315(6)]: Recovery is still made from all persons who were members before partition.
Key condition — what actually counts as "partition"
This is the trap most families fall into. Under Section 315(10), "partition" means an actual physical division of the property where the property admits of it, or such division as it does admit. A mere division of income without dividing the property, or a mere severance of status on paper, is NOT a partition for tax. So drawing up a memorandum saying "we are separate now" but keeping the house, business or FD jointly owned will not free anyone from HUF assessment.
Partial partition after 31 December 1978 — not recognised
Section 315(8) continues a long-standing anti-avoidance rule: a partial partition (of some members or some assets) taking place after 31 December 1978 is ignored. The AO will not inquire into it, any finding to that effect is null and void, and the family continues to be taxed as a full HUF, with members jointly and severally liable. Only a genuine total partition can be recognised today.
Penalties, interest and how each member's share is fixed
- Section 315(7) extends every rule above to penalties, interest, fines and other sums relating to the pre-partition period — not just tax.
- Section 315(9) caps each member's several liability to the value of the joint family property allotted to that member at partition, while joint liability can reach any of them.
Practical implications
- Document a genuine total partition with physical division of assets and apply for a partition finding — otherwise the HUF PAN keeps attracting HUF assessments.
- Members should settle all HUF tax dues before dividing assets, because they remain jointly liable afterwards.
- Don't rely on partial partitions for tax planning — they are legally void for income tax since 1979.
💡 Example
Worked example 1 — Partition during the year. The Sharma HUF earns income steadily through the year. It reports total income of ₹18,00,000 for the tax year, of which ₹12,00,000 accrued before a genuine total partition dated 1 December, and ₹6,00,000 after. Under Section 315(4), the department assesses the full ₹18,00,000-equivalent up to the partition date as HUF income — practically, all family income earned while the HUF existed is taxed in the HUF's hands, and the karta plus every member are jointly and severally liable for the resulting tax (say ₹3,50,000 including cess). If the HUF cannot pay, the AO can recover the entire ₹3,50,000 from any one member, though that member's several liability is limited to the value of assets he received on partition (Section 315(9)).
Worked example 2 — Partial partition ignored. The Verma HUF owns a shop and ₹40,00,000 in fixed deposits. In 2026 the family "partially partitions" only the FDs among three members to split interest income of ₹2,80,000 three ways and reduce tax. Under Section 315(8), because this is a partial partition after 31 December 1978, the AO refuses to recognise it. The entire ₹2,80,000 interest is taxed in the HUF's hands as if nothing changed, and all members stay jointly and severally liable. The planning simply does not work.
A relatable story. After their father's death, brothers Arjun and Rohit told their CA the family HUF was "finished" and stopped filing its return. Two years later a notice arrived for old HUF dues plus interest. Because they had only signed a family arrangement on paper and never physically divided the ancestral house or applied for a partition finding under Section 315, the law still treated them as an HUF — and the AO recovered the full demand from Arjun, who happened to have the bank balance. His only comfort was Section 315(9): his liability was capped at the value of what he had received. The lesson — get a real, total, physically-divided partition recorded, and clear dues first.
| Situation | What Section 315 says | Who is liable / effect |
|---|
| No partition finding recorded | 315(1) — family deemed to continue as HUF | HUF keeps being assessed as before |
| Partition claimed during assessment | 315(2)/(3) — AO inquires, notifies all members, records date | Finding of total/partial partition on record |
| Total partition during the tax year | 315(4) — income up to partition date taxed as HUF | All members jointly & severally liable |
| Total partition after year-end | 315(5) — whole year's income taxed as HUF | All members jointly & severally liable |
| Partial partition after 31 Dec 1978 | 315(8) — not inquired into; finding void | Family still taxed as full HUF |
| Mere income split / paper severance | 315(10) — not a "partition" | No recognition; HUF continues |
| Each member's several liability | 315(9) — limited to property allotted at partition | Joint liability can still reach any member |
| Penalty / interest / fine (pre-partition) | 315(7) — same rules as for tax | Recoverable from members |
Related sections
Section 171 (Act, 1961) — Assessment after partition of an HUF (predecessor provision) Section 270 — Assessment (proceedings during which partition is claimed) Section 271 — Best judgment assessment Section 313 — Succession to business or profession otherwise than on death Section 314 — Assessment when a business/profession is succeeded Section 2 — Definitions, including 'person' covering a Hindu undivided family
Frequently asked questions
Can I stop filing the HUF return once the family has divided?
No. Under Section 315(1) the family is deemed to continue as an HUF for tax purposes until the Assessing Officer records a formal finding of partition. Until that order exists, HUF assessments and dues continue.
Is a family settlement deed on paper enough to be treated as partition?
No. Section 315(10) requires an actual physical division of the property where it can be divided. A mere severance of status or a division of income without dividing the property is not a partition for income tax.
Does a partial partition of the HUF save tax?
No. Section 315(8) says any partial partition taking place after 31 December 1978 is not inquired into and is treated as void, so the family continues to be assessed as a full HUF.
If the HUF cannot pay its tax after partition, who pays?
Under Section 315(4)/(5) all members are jointly and severally liable, so the department can recover from any member. However, Section 315(9) limits each member's several liability to the value of the property he or she received on partition.
Does Section 315 apply only to tax, or also to penalty and interest?
It applies to both. Section 315(7) extends the same rules to penalties, interest, fines and other sums relating to the pre-partition period.
How is a genuine partition recognised for tax?
A member must claim it during assessment; the AO then inquires after notifying all members and records a finding of partition and its date under Sections 315(2) and 315(3).
Is Section 315 different from Section 171 of the old 1961 Act?
In substance they are the same. Section 315 of the 2025 Act simply re-drafts Section 171 in clearer, more streamlined language while keeping the deeming rule, joint liability and the 1978 partial-partition bar intact.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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