How can my son transfer property to grandmother?
Q. My wife died when my son was very young. As an emotional move my mother gifted her residential house to my son which was registered according to laws of Punjab. Now my son is 18 years old and he wants to return the property back to his grandmother. How can we do this and will we have to pay the registration charges and stamp duty again?
— Gurpreet Singh
A. An immovable property cannot be transferred without execution of the sale deed or a gift deed. This is in accordance with the provisions of Transfer of Property Act 1882 and read with Registration Act 1908. Therefore, in case your son wants give back the property to his grandmother it can be done by execution of a gift deed which will have to be registered with the Sub-Registrar. Punjab Government has allowed the transfer of properties between blood relations without the payment of stamp duty. However, infrastructure cess and the registration fee which works out approximately at about 4 per cent of the value of the property will have to be paid for the registration of the gift deed.
Constructing house from sale proceeds
Q.We had booked a flat in 1995 at Pune and possession was taken in December 1998. It was in my wife’s name. The total cost was Rs 2,29,717. We sold this flat in October 2014 for Rs 44 lakh.
Now we have bought a plot in Ludhiana for Rs 15 lakh and a sum of Rs 1,05,000 has been paid as registration charges. The plot was registered on December 18, 2014. This plot is also in my wife’s name. She is 66 years old. A map prepared by architecture has been submitted to Ludhiana Corporation recently and Rs 13,000 has been paid as their fee. As of now we are waiting for its approval. We want to begin construction as soon as we get the approval. The estimated cost of this construction is likely to be between Rs 18 and Rs 20 lakh. Kindly clarify:
- What will be the tax liability due to capital gain?
- Do we have to keep money in capital gain account immediately or wait or not to deposit at all since the expenditure will be incurred in near future?
- Is it easy to withdraw money from this account? Does it involve a lot of paper work?
- Is it better to pay tax and keep away from such hassles if any?
— Satish Kumar
A.Your queries are replied hereunder:
- Tax liability on the amount of long-term capital gain of Rs 37,29,828 would work out at Rs 7,68,345. The amount of capital gain has been computed after taking into account the year of acquisition and indexed cost of Rs 6,70,172 has been calculated on the said basis.
- In case you want to avail the exemption from taxability in respect of the long-term capital gain of Rs 37,29,828 you should deposit the amount of Rs 21,24,828 (37,29,828- 16,05,000 being the cost of plot purchased) under the capital gain scheme account before the due date of filing the tax return (which in your case would be on July 31, 2015). The amount of Rs 21,24,828 should be utilised for construction of a residential house within three years of date of sale of flat.
- It is not difficult to withdraw the amount from such an account as the same is for the purposes of constructing the house. It does not involve much of a paper work.
- It is advisable to avail the exemption which is permitted and legally save the tax. As stated above, there is no hassle involved in withdrawing the amount deposited under the capital gain scheme account.
Selling property on GPA
Q.I, along with my sisters, owned ancestral property at Pathankot. One of my sisters died sometime ago. Now her son and daughter are co-owners in our land. They are both living in Delhi. My sister’s daughter is a senior citizen and can’t travel because of health problems. Delhi Government has issued orders to not issue Power Of Attorney to persons for the properties owned by them in other part of the country. How can we sell the property in this case without the presence of my sister’s daughter? — Manjit Singh
A.Delhi Government has withdrawn the prohibition order for appointment of General Power of Attorney (GPA) and its registration with Sub-Registrar. There is no embargo now in operation, and therefore, you should obtain a General Power of Attorney in your favour. It may be added that a GPA can be registered in your favour at Pathankot also. You can also get a special Power of Attorney executed in your favour for the specific purposes of managing or so required, execution of sale deed on behalf of your sister.
Division of property between brothers
Q.We are two brothers. My brother owns a 250 sq yd property in Ludhiana GLADA area and he wants to transfer half of it in my name. Accordingly the ground floor will be in my brother’s name and the first floor will be in my name. The property has been mortgaged with the bank loan. Fifty per cent loan has been paid by my brother and the remaining will be paid me.
Kindly clarify:
- How much stamp duty will have to be paid?
- Will I be able to sell my share in future without any legal dispute?
What is the procedure, after paying the loan amount to bank, regarding the transfer and getting the NOC From GLADA Office.
We do not want gift deed. There should not be any clause in the registry for the forfeiture of the my right in future.
— Mohit Aggarwal
A.Both of you can execute a family settlement deed whereby the property is divided equally between both of you. Such family settlement deed can be registered without payment of stamp duty as any transfer of immovable property between the blood relations is not exigible to stamp duty under a notification issued by the Punjab Government. You would be liable to pay infrastructure cess and registration fee for the registration of the family settlement deed. The charges would be approximately 4 per cent of the market value of the property.
No objection certificate would be issued by GLADA office after the entire loan is repaid. There should not be any problem for issuance of such a certificate.
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