Can a husband sell property to wife?

It is a common notion that an absolute owner is at liberty to sell their property to anyone they wish to for as long as the legal procedure is duly followed. Does this mean a husband can sell his property to his wife and vice versa in India?  The answer is, that they absolutely can, provided they follow the rules of the transitions as described under various laws in India.

According to Brajesh Kumar, a Gurgaon-based lawyer who specialises in property law, if a husband were to sell his property to his wife or the other way around, they would have to prove that an actual sale has taken place.

“Among families, the most-used instrument to transfer property is gifting, and not sale. In case a wife decides to sell her property to her husband, the transaction must be registered by preparing a sale deed. More importantly, all rules applicable to the sale must be duly followed to avoid hassles at the time of registration,” says Kumar.

 

What is the difference between the sale and gifting of property?

For the uninitiated, when the owner of a property receives monetary compensation for the ownership transfer, this transaction would qualify as a sale. On the other hand, the transaction would qualify as gifting if the owner does not receive any monetary compensation for the ownership transfer.  A sale deed is executed to formalise property sale while a gift deed is executed if the property has to be gifted.

 

See also: What is the difference between sale and gift deed?

Why is gifting the preferred medium for property transfer among family members?

Gifting and not sale is the most common method to transfer properties to family members, including spouses, in India because of the monetary implications.

“Since land is a state subject, states levy stamp duty on instruments of registration. In most states in the country, the stamp duty is higher on registration of gift deeds when compared to the stamp duty on sale deed. Also, many states like UP offer a special rebate on stamp duty if property transfer through a gift deed is made among family members,” says Prabhanshu Mishra, a Lucknow-based lawyer.

In August 2023, the Uttar Pradesh government fixed the stamp duty on gift deeds at Rs 5,000 on property transfers among family members.  Another Rs 1,000 must be paid as the processing fee along with the Rs 5,000 stamp duty. On the other hand, India’s most populous state charges a 7% stamp duty on the registration of sale deeds.

Some states like Delhi on the other hand impose the same amount of stamp duty on sale deeds and gift deeds. In the national capital, one has to pay 4% stamp duty whether the registration instrument is a sale deed or a gift deed.

 

See also: Stamp duty and registration charges on gift deed

 

Rules husbands/wives should follow while selling property to their spouses

In case you still prefer to go for the sale of the property for personal reasons, legal experts share the following tips:

 

Don’t undervalue the property

A property’s value is calculated using the prevalent circle rate in your area. Make sure the property is valued keeping in view those rates. In case of a sale, you can’t undervalue the property and sell it at rates below the circle rate because you are selling the property to your spouse.  

 

Register the transaction

Under the Registration Act, all property transactions involving a value of over Rs 100 must be registered. The low benchmark practically covers all property transactions.

“Don’t be misled into believing that not registering the sale is alright because the deal is happening between family members. As is the rule, in case of a sale, you will have to register the deed after payment of stamp duty and registration charges,” says Mishra.

 

Keep the payment records ready

The payment and reception of money differentiate the sale deed from a gift deed. Any transaction does not qualify as a sale until the money has been received by the seller and paid by the buyer. The spouses will have to prove this through payment history at the time of property registration at the sub registrar’s office, according to Kumar.

 

Can husband/wife sell ancestral property to each other?

Unlike self-acquired properties over which the owner has absolute freedom to sell, ancestral properties are shared assets of a family. Till the time those are divided among family members following the due procedure and attaining the status of the member’s self-acquired property, selling them would not be possible, according to Mishra.

See also: What is a self-acquired property?

 

FAQs

Can a husband sell his property to his wife?

Yes, he has to file for a sale deed to sell his property to his wife.

How do I transfer my husband's property to my wife?

The husband can file a gift deed or a sale deed to transfer the property to his wife.

Can a person sell his property without the consent of his wife?

Yes, this can be done if the wife does not co-own the property.

Can I transfer my home to my wife?

Yes, the best way to do this is by transferring it as a gift or by selling it to the wife.

Can a wife sell property without her husband's signature?

Yes, a wife can sell property without her husband’s signature only if she co-owns the property.

What are the income tax rules on the sale of property bought in the name of wife?

As per the rules, any income arising from the sale of the property will be taxed from the earnings of the husband.

Does a husband own his wife's property?

No, a husband does not has any right over his wife’s property.

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