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Tag: gift deed

  • Can I bequeath my property to solely thought-about certainly one of my youngsters?

    I’m a 65-year-old woman and have two sons. Can I draft a will bequeathing all my belongings to my elder son who takes care of me? Do I need a no-objection certificates (NOC) from my youthful son?

    —Name withheld on request

    You are entitled to bequeath all your property to any specific particular person of your choice, be it any of your youngsters or a third social gathering. Further, no NOC is required to be obtained from any of your youngsters for executing your will throughout the technique you deem match and proper. However, please bear in mind that the way in which by which your property is perhaps bequeathed moreover is set by the personal regulation that is related to you on the time of your demise. Hence, we suggestion that you just simply contact a lawyer who will help you in executing a will sustaining in ideas the acceptable regulation that is related to you.

    I private a bungalow in Mumbai. Now, I would like my partner to be the co-owner of the bungalow. Is it attainable to take motion with none type of consideration or do I’ve to draft a will and bequeath the bungalow to her?

    —Name withheld on request

    There are two strategies to change 50% of the possession of your bungalow in favour of your partner with out passing any type of consideration.

    If you want to try this all through your life time, you presumably can execute and register a gift deed in your partner’s title such that fifty% of the rights throughout the bungalow are transferred in your partner’s title. At the time of execution and registration of the current deed, you will be required to pay the related stamp accountability, metro cess and the registration expenses on the current deed.

    In the event that you just simply want to swap the rights of the bungalow in your demise, you presumably can execute a will specifying that fifty% rights for the bungalow must be transferred to your partner upon your demise. However, on this case, we would suggestion that you just simply moreover level out the way in which by which the steadiness 50% entitlement throughout the bungalow shall be dealt with.

    Sagar Kadam and Mitali Naik are companions at DSK Legal.

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  • Can youngsters declare rights over property that has been bought?

    A girl bought her share of the ancestral property in 1960. Can her three youngsters, all of whom had been born after the sale, have any declare within the ancestral property?

    —Name withheld on request

    Your question infers that the ancestral property was partitioned in 1960 and pursuant to such partition, the girl transferred her entitlement earlier than the start of three youngsters. Once the ancestral property is partitioned, it ceases to have the character of ‘ancestral property’ and turns into ‘self-acquired property’ within the arms of the member of the family who has obtained it, which supplies such member of the family an unfettered proper to deal and/or eliminate such property.

    In this case, on condition that the girl transferred and bought her entitlement obtained pursuant to the partition of the ancestral property, her youngsters born after such switch wouldn’t have the fitting to say any proper to the property bought by their mom, as the identical had turn into her self-acquired property by advantage of the partition.

    I need to reward my flat to my daughter. Should I reward the flat now or make a will and bequeath it to her after my dying. Do I’ve to pay stamp responsibility on these transactions after which get it registered? What could be essentially the most cost-effective method of getting this carried out?

    —S Madan

    For the lifetime reward of immovable property reminiscent of a flat, the reward deed should be duly stamped and registered with the workplace of sub-registrar of assurances. The quantum of stamp responsibility will depend on the state and placement the place the flat is located.

    Alternatively, the flat will be bequeathed to your daughter beneath your will – however this switch will then solely occur after your dying and the relevant post-death formalities and probate (if relevant) is accomplished.

    Fortunately, a will doesn’t entail cost of any stamp responsibility—so from this slender perspective, that is less expensive. As you appear to have only one inheritor, a will relating to the property is likely to be extra appropriate for you.

    However, if the need is made in Kolkata, Chennai or Mumbai or if the need is made exterior these territories however the flat is located in any of those territories, a probate of the need shall be required to be obtained which is able to entail cost of courtroom charges.

    We suggest consulting your legal professional who will be capable of quantify the prices concerned in each choices submit reviewing the requisite documentation which is able to enable you to take an knowledgeable determination.

    Rishabh Shroff is accomplice & co-head, non-public consumer, Cyril Amarchand Mangaldas.

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  • How will I be taxed on sale of a joint property?

    My two daughters collectively bought a residential plot in August 2007 inside a longtime housing complicated in Rajasthan. I entered into an settlement with my daughters in July 2012 and took the rights of setting up a residential home in that plot at my very own bills. It was additionally agreed that I might earn any rental revenue and pay taxes as relevant. The development was accomplished in July 2013 and the constructing was rented out that very month, with a lease settlement duly executed with  the tenant.

    I gifted the residential constructed property in August 2021 to my daughters by means of a suitably worded reward deed, duly notarized. 

    The sale deed was executed and registered with the native authority, sub-registrar Neemrana, in September 2022. However, I shall proceed to earn rental revenue until the sale of the whole property, as per the July 2012 joint settlement. 

    My daughters have now proposed to promote the property earlier than 31 March  2023. How will LTCG on  the plot from its date of buy, i.e August 2007, and LTCG of the residential home constructed later, i.e. July 2013, be computed when the overall property is bought?

    Will LTCG and tax advantages U/S 54EC be equally cut up among the many joint homeowners after taking into account the stamp obligation, brokerage and different associated bills together with the foremost development value of the residential home?

    Name withheld on request

    Since, the phrases of the settlement or the reward deed usually are not accessible, it isn’t clear whether or not you had the possession title of the residential home constructed by you or solely the rights to make use of/ set free the residential home, which was subsequently gifted by you in equal proportion to the daughters in August 2021. 

    Since the property (plot of land and the constructed residential home) was held for a interval of greater than 24 months previous to sale, the whole property will qualify as long-term capital asset (LTCA) and the revenue arising from its sale shall be thought of as long-term capital achieve (LTCG).

    The value of such property within the palms of your daughters shall be the price of the plot as elevated by the price of development incurred by you and the stamp obligation, and brokerage expenses incurred for registration of the property. Also, whereas computing the LTCG, your daughters are eligible for the advantage of indexation in respect of the price of the property (whereby the price of plot shall be listed from 2007 whereas the price of development / different expenses shall arguably be listed for the respective 12 months of cost).

    Also, LTCG shall be cut up among the many daughters within the proportion of investments made by them on the time of buy. 

    Further, the accessible deductions as relevant (together with underneath part 54EC), shall be accessible to each the daughters in proportion of specified investments made by them individually towards their respective share of LTCG revenue.

    Parizad Sirwalla is companion and head, international mobility providers, tax, KPMG in India.

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  • Is it necessary to get NOC for a present deed?

    Is it necessary for individuals to acquire a no-objection certificates (NOC) from their members of the family for any present deed acquired by them?

    —Name withheld on request

     

    Under the related provisions of the Transfer of Property Act, 1882, ‘gift’ is the switch of sure present moveable or immoveable property made voluntarily and with out consideration, by one individual—the donor—to a different—the donee—and accepted by or on behalf of the donee. Acceptance should be made in the course of the lifetime of the donor and whereas he’s nonetheless able to giving. 

    If the subject material of a present is immovable property, the identical is required to be duly stamped and registered on the sub-registrar of Assurances having jurisdiction for the present of immovable property to be legally legitimate.

    So lengthy because the donor is the authorized proprietor of the property and it’s self-acquired, he can present the property in favour of anybody. It is legally incorrect to state that for accepting a present, the donee has to take an NOC from his members of the family. A duly registered present deed is enough for effecting switch of all rights, title and curiosity within the property unto the donee.

     

    I’ve purchased a flat from my brother and sister-in- legislation. The ‘Society’ lawyer has opined that switch charges aren’t payable below bye-law No.38 because the transaction is between members of the family. Is this proper?

    —Name withheld on request

     

    We assume from the studying of the question that the flat is positioned in a society ruled by the Maharashtra Co-operative Societies Act, 1960.   

    The switch of shares and curiosity within the capital /property of the society are ruled by the process prescribed below bye-law no. 38 to which a ‘note’ is appended, which inter alia offers that “cost of quantity of premium shall not apply to switch of shares and curiosity of the member/transferor within the capital/property of the society to the member of his household or a registered present deed executed by the member/transferor”. 

    Further, the definition of the household below the bye legislation inter alia contains in its definition brother and sister-in-law. Thus, such a transaction between members of the family is not going to appeal to any switch charges even when the transaction is thru a sale or present deed.

    In the situation, the opinion of the society lawyer is by way of the bye-laws.

     

    Aradhana Bhansali is accomplice, Rajani Associates.

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    First article

  • How is the gifting of cash or property to a relative taxed?

    I need to present cash to my elder brother. What would be the tax implications. Can I additionally present immovable property to my brother?

    — Name withheld on request

     

    Gifts inside kinfolk are exempted beneath part 56 of the Income Tax (I-T) Act 1961 . Further, a brother qualifies as a ‘relative’ beneath the I-T Act. Therefore, any present by you to your brother can be exempt from taxation in your brother and your self. As regards gifting of immovable property, the identical will even be exempt from tax beneath the I-T Act. However, for the present to be efficient, the present deed must be duly stamped and registered. 

     

    My father died intestate abandoning some shares in bodily format. These shares are in my possession. I need to share these property equally with my sister, however she isn’t cooperating in getting this completed. Under the circumstances, what’s the answer for getting the property transferred.

    — Name withheld on request

     

    In this case, assuming there is no such thing as a different authorized inheritor, as per part 51 of the Indian Succession Act 1925, you and your sister might be entitled to your father’s property/property in equal proportion. Do word that authorized possession and entitlement is completely different from possession (bodily or in any other case). 

    As regards getting the shares transferred, the way of the non-cooperation of your sister is unclear. Also, your question appears to point that your father had not filed any nomination in relation to the shares. The course of for transmission of the shares might be guided by the articles of affiliation of the corporate and any nomination that could be in place, after complying with the requisite course of.

    Broadly talking, that title to the shares might be full as soon as your place as a authorized inheritor is crystallized. Appropriate proceedings for acquiring grant of letters of administration or a succession certificates could also be filed earlier than the related courtroom, relying on the recommendation of your lawyer. Such proceedings will be filed by you, nonetheless, the identical will embrace issuance of discover to your sister, who additionally must be on board with this method. If your sister doesn’t object to the identical, the grant will be issued in your identify. Once the letters of administration/succession certificates is obtained, you possibly can method the corporate and get your entitlement (i.e., 50% shares) transferred in your identify.

    Rishabh Shroff is accomplice, Cyril Amarchand Mangaldas.

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  • Share switch: When it’s worthwhile to make a present deed

    My good friend had   bought 100 shares of Vaniti organics @ Rs.50/   within the yr 2000 for  Rs.5000/- on my behalf. The shares are nonetheless in his demat account. After cut up and bonus the variety of shares has elevated to 750 and the current worth of those shares is round 15 lakh. When the shares are transferred to my account, is any tax is relevant?  If so,   any settlement is to wanted to be made on stamp paper? 

    It is tough to imagine and persuade anybody that the shares purchased by your good friend in your behalf 22 years in the past remained with him so lengthy. So it is going to be tough so that you can declare that these shares belong to you. The different possibility so that you can get these shares again is to make your good friend present these shares to you.  Gift tax has been abolished lengthy again and as a substitute of the donor paying tax on presents made now the recipient of the present has to pay tax on the worth of presents obtained if the combination worth of all of the presents obtained throughout the yr exceed fifty thousand rupees. 

    Though there are specific transactions that are exterior the ambit of such taxation however your case just isn’t lined beneath any of these transaction due to this fact you’ll have to embody the market worth of the shares on the date of present in your earnings and pay taxes accordingly. 

    Please observe there is no such thing as a tax legal responsibility in your good friend for this transaction. You will even need to pay advance tax on market worth of those shares together with tax legal responsibility in respect of your common earnings. For implementing the transaction, it is best to put together a present deed on stamp paper.  For a present to develop into legitimate and full it has to accepted by the recipient additionally throughout the life time of the donor. So your good friend and also you each should signal the present deed. 

    Balwant Jain is a tax and funding professional and may be reached on [email protected] and @jainbalwant on Twitter

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  • Can a present deed be executed in India on behalf of somebody who stays overseas?

    I’ve a question concerning a present deed. My father-in-law desires to present his flat to my spouse vide present deed, however he stays overseas. Can he execute the present deed within the Indian embassy over there?

    The different choice is he has already registered an influence of lawyer in his son’s identify to promote the property, so can his son come to India and execute the present deed?

    – Name withheld

    For the present deed to be efficient in India, the identical should be stamped and registered in India. Since your father-in-law is residing overseas, he can take into account executing an influence of lawyer earlier than the native embassy abroad for appointing a reliable consultant who can perform the execution and registration of such present deed in favour of his daughter in India, on his behalf. It is advisable that your father-in-law liaises with the native embassy to establish the method of executing such energy of lawyer.

    As regards the opposite choice, assuming that his son has the ability to execute an instrument of switch/sale/present underneath the ability of lawyer registered in India, such a son can execute and register the present deed in India on his behalf.

    The question was answered by Rishabh Shroff, companion & co-head, non-public consumer, Cyril Amarchand Mangaldas. 

    (Queries and views at [email protected].)

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  • Two witnesses must be current for executing a present deed

    My father needs to switch our home to my sister as a present deed. I’m keen to signal a no objection certificates for a similar. My father can’t maintain a gradual hand whereas writing or signing and isn’t capable of stand up on his personal, not to mention stroll. The home is in my father’s identify. My sister has been caring for my mom and father for years now. Somebody mentioned that we must always rent a professional for video recording if my father can’t go to the registration workplace to signal the present deed. It may price ₹30,000-40,000. Would his thumb impression taken at house be sufficient? What is the correct course of to observe?

    —Name withheld on request

     

    Your father can be permitted to make use of his thumb impression to execute the present deed. We would advocate that you just receive a medical certificates out of your father’s consulting doctor, testifying to your father’s psychological capability to execute paperwork. This may additionally elaborate on his current bodily situation.

    The physician’s certificates can be essential for evidentiary functions ought to the present deed be challenged sooner or later. We would additionally advocate a video recording of the execution, the place he can acknowledge that he absolutely understands the scope of the present deed and is executing the doc with none coercion, and so forth. The recording should particularly seize the second whereby your father affixes his thumb impression on the present deed.

    The presence of two witnesses for the execution of the present deed will probably be required. The present deed may even must be registered. You might have to talk to your native registrar to acquire an exemption to your father from attending the registration course of in particular person. The physician’s medical certificates can be helpful for this objective as effectively.

    The switch beneath the present deed would additionally entice the fee of stamp responsibility (the quantum of stamp responsibility would rely on the placement of the property).

    Rishabh Shroff is companion, Cyril Amarchand Mangaldas.

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  • Take your loved ones into confidence earlier than you execute present deed

    What are the paperwork required for a present deed? I’ve given ₹15 lakh to my father and mom.

    —Manish Aidasani

     

    You haven’t specified whether or not the stated present was made in money, or as moveable belongings of the stated worth. Typically, for a present of movable property, it isn’t obligatory to execute a proper present deed. Your question means that the present is definitely already made, however simply in case, listed here are just a few ideas on a “new” present being made.

    In a typical present deed, it’s best to point out the next: the present quantity to be transferred is out of pure love and affection;  PAN particulars of the donees (i.e. your dad and mom);  in the event you desire, you may additionally present a cause for the stated present (i.e. common welfare, medical bills, and many others.) and proof of acceptance of the present by the donees (i.e. your dad and mom) by the use of counter-signatures. 

     

    We are a Hindu household of 4—my dad and mom, sister and I. My mom and father are each senior residents. I’m the youthful daughter. Both my sister and I are married. My father owns a industrial property, whose possession we wish to switch in my title, with the consent of my sister. What is the simplest solution to go about it? 

    —Name withheld on request

     

    We assume that the industrial property was self-acquired by your father in his particular person title; and likewise assume that it had no encumbrances over it. 

    To switch the property throughout your father’s lifetime, a easy present deed may be executed by your father solely in your favour. The present deed should be registered and the switch would additionally entice cost of stamp responsibility. 

    We would additionally suggest that you simply acquire a no-objection certificates out of your mom and your sister (in respect of the present deed) to make sure that all family members are in alignment with the proposal. This could be the best and cleanest method, and would assist you to have good marketable title over the property in case of a future sale.

    Rishabh Shroff is companion, Cyril Amarchand Mangaldas.

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  • Gift deed or a Will: Which one do you have to selected for transferring your asset?

    There are two methods by means of which you’ll be able to switch your belongings to anybody together with your children-by gifting throughout your lifetime or bequeathing by means of a Will. Both the modes have their very own execs and cons so allow us to talk about which possibility you must use.

    Transferring your asset throughout your life time by means of reward

    Anyone who’s competent to contract can reward his belongings to anybody. Some individual like minor or an individual of unsound thoughts or an undischarged bancrupt are incompetent to enter into any contract. You could make a present in favour of a dwelling one that has to simply accept the reward throughout the lifetime of the individual making the reward.

    Some individuals consider in immediate gratification and would favor to see that their belongings are handed over to the meant beneficiaries throughout their life time to derive the satisfaction and to keep away from any litigation which can come up after demise. This goal of immediate gratification might be achieved by gifting your asset to the meant individual. Movable belongings can, typically, be gifted simply by hand supply however items of immovable property must be accomplished by means of a present deed which attracts stamp responsibility at market worth of the property as on the date of execution of the reward deed and can be required to be registered. In case the reward in favour of sure blood relations, a number of the states like Maharashtra have provision for cost of nominal stamp responsibility.

    In addition to the stamp responsibility implications for gifting your belongings, there are specific earnings tax implications additionally within the palms of the recipient until he’s coated inside the class of relations specified below the earnings tax legal guidelines. In case a present is made in favour of an individual who will not be specified relations and mixture worth of all of the items obtained by the recipient exceeds Rs. 50,000/- throughout the yr, the recipient has to incorporate market worth of the belongings obtained as items in his earnings and pay tax on such reward like common earnings. Please notice that individual giving the reward doesn’t have any earnings tax implication.

    Bequeathing your belongings by means of a Will

    Unlike the reward in case of a Will the switch of asset bequeathed turns into efficient solely after demise and you’re free to alter your Will any time and any variety of occasions in case you modify your thoughts. As a Will is neither required to be stamped neither is it required to be registered in contrast to a present deed and as India doesn’t have any inheritance tax, the belongings get handed on to the meant beneficiary with minimal value. Though the non-relative recipient has to pay tax on the worth of the items obtained throughout the yr in case the mixture worth of all of the items obtained throughout the yr exceed the brink, the belongings obtained below a Will are tax free even within the palms of non-relatives.

    In case an individual doesn’t make a Will or the Will made doesn’t cowl all of the belongings, such belongings go on as per the private succession legislation relevant to the individual. Under Hindu Succession Act, 1956-the legislation of succession relevant to Hindu, there aren’t any restrictions on a Hindu individual about extent to which he can bequeath his belongings in addition to to whom he can do.

    Which one you must go for?

    It could be very tough to reply this query as a consequence of prevalence of various circumstances for various individuals. However, one can consider sure elements earlier than one zeros in on a particular plan of action. So for instance in case your want is to make sure that all or sure belongings owned by you go on to individuals of your selection after demise solely and also you wish to get pleasure from and have management over these belongings throughout your life time, will is a greater and extra advisable means. A Will can be advisable the place you wish to guarantee clean succession of your belongings after your demise and your goal is to make sure that some specified individuals solely will get maintain of your belongings to the exclusion of all or some particular authorized heirs.

    However, if that you must assist somebody who’s wants the assistance instantly, it will possibly solely be ensured by means of a present. This mode to switch of your belongings ought to be resorted to solely when the necessity to switch the asset is pressing at that second. If you switch all or substantial a part of your belongings to your authorized heirs throughout your lifetime, you might in all probability must face dire state of affairs in your previous age. We should have witnessed such instances round us in abundance. The case of a well-known industrialist having to remain in a rented home could be very recent in our reminiscence.

    Moreover, it’s a unhealthy transfer to switch your belongings only for tax planning goal. Logically it’s silly to lose management of your belongings simply to avoid wasting a couple of dollars in taxes. Gift as mode of asset switch is advisable while you want to guarantee and witness switch of a full or a part of your property throughout your lifetime to keep away from any litigation in future. Remember; by no means ever reward away substantial a part of your wealth so long as you’re alive. You can partly reward away a part of your belongings whereas bequeathing the residual by means of a Will.

    Balwant Jain is a tax and funding knowledgeable and might be reached on jainbalwant@gmail and @jainbalwant on Twitter

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