Whereas gifting a property, stamp obligation relies on relationship

Mint

I’m the first proprietor and my mom is the co-owner of a flat as per the preliminary settlement. Nevertheless, I would like her to be the only real proprietor. Do I must go for a present or a launch deed? Additionally, do I must have a will made stating publish her demise I would be the solely son to amass the flat? What would be the proportion I must pay as stamp obligation and registration?

—Niraj Khanna

Whereas answering the question, we’re assuming that the flat that you’ve referred to within the question is located in Mumbai and that the provisions of the Bombay Stamp Act, 1958, are relevant and in addition that the stated flat is just not an ancestral property.

Because you and your mom are co-owners of the stated flat, chances are you’ll execute both a present deed or a launch deed to switch your share to your mom.

Within the occasion that you just reward your share within the stated flat to your mom, the reward deed could be stamped below article 34 of schedule 1 of the Act. Since you’re gifting your share within the stated flat to a member of the family, the stated reward deed would fall below the proviso of the above-mentioned article, which gives that the stamp obligation payable on the reward deed below which property is being gifted to a member of the family, could be 2% of the market worth of the property.

Within the occasion that you just launch your share within the stated flat in favour of your mom, the discharge deed could be stamped below article 52 of schedule 1 of the Act which gives that the stamp obligation payable on a launch deed:

(i) if the discharge is of an ancestral property or any half thereof in favour of a member of the family is 200, and

(ii) in every other case the stamp obligation payable is 5% of the market worth of the property.

Thus, as said aforesaid, assuming the stated flat is just not ancestral property, it’s clear that, from the stamp obligation perspective it could be advisable so that you can execute a present deed in favour of your mom, gifting her your share within the stated flat and stamp the reward deed below article 34 of schedule 1 of the Act at 2% of the market worth of the property.

As per the relevant provisions of the Registration Act, 1908, because the reward deed would cope with immovable property, the identical would have to be registered with the relevant sub-registrar of assurances. In your case, the registration costs payable could be 1% of the market worth of the property, topic to a cap of 30,000.

With regard to your second question, it could be advisable in your mom to execute a will, even if you’re her solely authorized inheritor in order to keep away from claims by every other kinfolk to her property. It might be famous that there isn’t any stamp obligation required to be paid in case of a will and this doc needn’t compulsorily be registered below part 17 of the Registration Act, 1908.

Queries and views at mintmoney@livemint.com

Shabnum Kajiji is accomplice, Wadia Ghandy & Co. Advocates, Solicitors and Notaries

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