Property gifted to household will entice stamp responsibility of two%

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My father purchased an condominium in Mumbai which is registered collectively in our names. He now needs to switch the condominium to me. I collect that gifting is a greater choice than relinquishment by way of stamp responsibility and taxation. In case of gifting, are you able to inform me if the stamp responsibility could be payable solely on half the worth of the condominium, although I’ve not contributed throughout buy? Additionally, as I’m already a co-owner, wouldn’t it be advisable to present his share to a different individual within the household, say my spouse?

—Nakul Joglekar

Whereas answering this question, we’re assuming that the stated property is located in Mumbai and that the provisions of the Maharashtra Stamp Act, 1958 shall be relevant. And, because the property in query has been acquired by your father, it is not going to fall throughout the ambit of ancestral property.

There are two sorts of joint possession, i.e. joint tenancy and tenancy in frequent. In case of joint tenancy, on the demise of one of many joint house owners the property robotically passes to the survivor. In case tenancy in frequent, upon the demise of one of many joint house owners the property passes to the heirs of the deceased and to not the surviving proprietor. Please observe that except your title deed (deed of conveyance) particularly states that the property is owned by you and your father as joint tenants, it’s presumed that the property is owned by each of you as tenants in frequent. You’ll subsequently have to find out how the property is being held.

As a observe of warning, though the property could also be held as a joint tenancy, because you haven’t paid on your half of the property, in your father’s demise, your father’s different heirs might declare a stake in the whole property and never simply in his share. Due to this fact, it’s possible you’ll want to search particular authorized recommendation, primarily based on the style by which the title deeds/agreements have been drafted, whether or not it’s advisable on your father to present the whole flat to you or solely his 50% share. Alternatively, you father can draw up a will and bequeath the whole flat to you.

Just about your first query, in case your father is gifting solely his share of the property to you, the present deed that your father shall execute in your favour should clearly point out that he’s gifting his 50% share within the stated property to you.The stamp responsibility payable will solely be on the half of the market worth (prepared reckoner worth) of the property, as he’s gifting solely his half share to you. The stamp responsibility payable in instances the place a present is being made to a member of the family, i.e. to the husband, spouse, brother or sister of the donor or any lineal ascendant or descendant of the donor, then the quantity of responsibility chargeable shall be 2% of the market worth (prepared reckoner worth) of the property.

As per Article 52 of Schedule I to the Act, the stamp responsibility payable on a launch deed is (a) 200 if the identical is in respect of ancestral property and the discharge is in favour of the individuals named within the relevant Article, or (b) in each different case, 5% of the market worth (prepared reckoner worth) of the property. Because the property will not be ancestral property, for a launch deed, the latter will apply. Thus from a stamp responsibility perspective, it’s advisable to execute a present deed somewhat than a launch deed.

Just about your second query, from a stamp responsibility perspective it doesn’t matter whether or not you’re a co-owner of the property. Within the occasion your father items the property to your spouse, the stamp responsibility payable on the present deed shall be 5% of the market worth (prepared reckoner worth) of the property, as a daughter-in-law doesn’t come throughout the aforementioned definition of member of the family enumerated in Article 32 of Schedule I to the Act.

Please observe that as per part 17 of the Registration Act, 1908, a present deed the subject material of which is an immovable property, is a compulsorily registerable doc. Thus the identical needs to be registered with the registrar of sub assurances inside whose jurisdiction the stated property falls.

For advise on the tax implications, it is suggested that you just seek the advice of a tax adviser or chartered accountant.

Queries and views at mintmoney@livemint.com

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