When is partition deed used for property division?

Partition deed is that legal document drafted and executed at the time of division of a common property. A partition deed is mostly used by families, to divide members’ shares in inherited properties. After the division through the partition deed, each member becomes the independent owner of his share in the property and is legally free to sell, rent or gift his asset, according to his wishes.

See also: Coparcener meaning in HUF context

 

When do you need a partition deed?

The need for a partition deed arises, when it becomes important to create a clear division of shares in a common property.

See also: Partnership deed must be stamped as required by Indian Stamps Act

 

 

 

See also: Can gift deed be revoked

 

Contents of a partition deed

A partition deed would mentioned the following information:

• Date of partition
• Statement of partition
• Name, age and address of the joint owners
• Description of their share
• Signatures of the joint owners
• Names and signatures of the witnesses

Also read: Stamp duty on property registration in Gujarat

 

Documents needed for partition deed

To execute a partition deed, the following documents are required:

• Original title document
• Land records
• Land map
• Valuation of property
• Registration fee
• Stamp duty
• ID cards of all the parties
• Address proof of all parties
• PAN card

See also: Deemed conveyance meaning

 

How to register a partition deed?

The procedure of partition deed registration is by and large similar in most states. In our example, we are showing you the process to register partition deed in Delhi:

Step 1: Visit the Delhi Online Registration Information System (DORIS) website.

 

 

Step 2: On the homepage you will se the ‘Deed Writer’ option. Click on it.

 

 

Step 3: From the options available, select ‘Partition Deed’ option.

 

 

Step 4: From the sub deed option, select ‘Partition Deed’.

 

 

Step 5: You will now be asked to provide the mobile number of the second party, and property valuation.

 

 

Step 6: You will now have to follow a detailed process to provide first party, second party and witness details to start partition deed registration process.

 

 

Once you done with that, you will have to pay the e-stamp duty on the Stockholding Corporation of India website. After the payment of stamp duty and registration charges, you can book an online appointment to register the partition deed at the sub-registrar’s office.

Also read all about probate meaning, uses and how to apply for it

 

Stamp duty on partition deed

To attain legal validity, a partition deed must be registered with the sub-registrar of the area in which the immovable asset is located. This is mandatory under Section 17 of the Indian registration Act, 1908. This means that the parties involved in the partition, will have to pay stamp duty charges (under the provisions of the Indian stamp Act, 1899) and registration charge, to get the partition deed registered.

Stamp duty on partition deed varies from state to state. For example, in Delhi, 2% of the value of the separated share of the property has to be paid as the stamp duty on a partition deed. The same rate is applicable on registration of partition deeds in Maharashtra, along with a 1% registration charge. (However, it is not mandatory for the co-owners to register the partition deed in the state.)

know about: Partnership deed

Income tax on partition deed

Since no transfer has taken place as such through the partition, the beneficiaries are not liable to pay any capital gains tax after the division.

See also: What is a title deed?

 

Partition deed: Legal aspects

How is property divided through a partition deed?

If a property is being divided between two people who have invested in the purchase, the division is based on their respective contribution. If two siblings bought a property for, say Rs 1 crore and each contributed Rs 50 lakhs, the property will be divided equally between the two parties through a partition deed. If the ratio of their contribution is 60:40, the division would be in this manner. However, the law assumes each member to have an equal share in an undivided property, unless documentary proof stating otherwise is produced.

In case of inherited property, co-owners would get their share in a property based on their treatment in the inheritance law governing their religion.

See also: Types of joint ownership of property

 

Application of inheritance laws on partition deed between family members

Partition of any property is subject to the laws of inheritance. This brings into picture inheritance laws governing property division among Hindus, Muslims and Christians. At the time of partition, the share of each member is determined, based on his entitlement under the applicable inheritance laws.

See also: All about property rights of daughters married before 1989

 

Partition of property under Hindu law

According to the Hindu Succession Act, 1956, a deceased Hindu’s assets are divided among his legal heirs, either according to his will, or under the rules stated in the Act if the person has died without leaving a will – i.e., intestate. While the Hindu Succession Act, 1956, is applicable on the partition in a Hindu Joint Family, the Hindu Partition Act of Property, 1892, is applicable on partition of a property that is jointly owned.

See also: Inheriting assets after death of the owner

 

What happens to a property after a partition deed is executed?

Once the partition deed comes into effect, each share in the property becomes an independent entity. Each divided share of the asset gets a new title. Also, members surrender their claim in the shares that have been allocated to the other members.

For example, if Ram, Shyam and Mohan divide a property through a partition deed, then, Ram and Shyam would give up their right in the part that has been allocated to Mohan. Similarly, Mohan would give up his right in the shares allotted to Ram and Shyam. Apart from the common areas where easements rights are applicable, each one has an independent property within an estate, after its partition. This also provides them the right to deal with their share in a manner they like.

After the partition, each party must also complete the property mutation process, to make the change legally valid.

See also: What is mutation of property and why is it important?

 

Is it compulsory to register a partition deed?

In 2018, the Maharashtra government said that the process of partition of properties belonging to a Hindu Undivided Family (HUF) and the receipt thereof by a coparcener, do not fall under the definition of ‘transfer’. Consequently, it is not compulsory to register such partition deeds. Note here that in case the partition has been affected through a partition deed, which has not been registered, the deed will not be admissible as a proof in a court of law.

 

What if partition deed is not registered?

If the partition deed  is not registered by paying the applicable stamp duty and registration charges, it will have no legal validity. Consequently, the unregistered partition deed will not be admissible as an evidence under Section 49 of the Registration Act, 1908.

See also: All about property registration laws in India

 

Difference between partition deed and partition suit

Under the provisions of the law, a property would be divided, either by way of a partition deed or by a partition suit. The need to go for the second option arises, in case of a dispute or in cases where the co-owners do not mutually agree to the partition. In this case, a partition suit must be filed in an appropriate court of law.

Before one can file a suit, they will have to issue a request to all the co-owners, demanding partition. In case the parties refuse to entertain your request, you are within your legal rights to move court over the matter. Under the Indian laws, the aggrieved party must approach the court within three years, from the date when the right to file a partition suit accrues.

Both the instruments, however, serve the same purpose – they create and extinguish rights of co-owners in a jointly owned property.

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Treatment of verbal partition of property or family settlement under the law

Under the laws governing inheritance among Hindus, Jains, Buddhists and Sikhs, Class-I heirs of a property can enter into a verbal memorandum of family settlement and divide the property on mutually agreeable terms. Since this oral agreement has been reached without using the partition deed as an instrument, the need to register the transaction is entirely avoided.

While delivering its verdict in the case of Nitin Jain versus Anju Jain and others, a division bench of the Delhi High Court, in 2007, ruled that no stamp duty is payable in case of a verbal division of property.

“It’s legally permissible to arrive at an oral family settlement dividing/partitioning the properties and thereafter, record a memorandum in writing, whereby the existing joint owners, for the sake of posterity, record that the property has been already partitioned or divided,” the bench held.

“Courts have recognised oral partitions in cases of joint families. An oral partition is not an instrument of partition, as contemplated under Section 2(15) of the Stamp Act. Therefore, as it is not an instrument, no stamp duty is payable on an oral partition,” the HC further said.

However, in the absence of a partition deed, the shares of the co-owners remain undivided in this kind of arrangement. This also means, they are not free to sell, gift or transfer their share in their property on their own.

See also: All about e stamping

 

Partition deed sample

Provided below is a general partition deed sample. Note here that this partition deed format is only to give the readers a general view of the deed.

 

This deed of partition made at __________this _________ day of

(1) Mr._________________, S/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the first party.

 

(2) Mr_________________, S/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the second party.

(3) Miss_________________, D/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the third party.

 

WHEREAS;

1. The parties are the members and coparceners of their joint and undivided Hindu Family and a house property situated at ________________, the details of which are given in Schedule ‘A’. Each party hereto is entitled to a share in the said property.
2. The parties desire to implement a partition of the said properties amongst themselves as they no longer desire to continue as members and coparceners of their joint family property.
3. The parties have agreed that the said property will be divided in such a way that:

(a) The property described in the first schedule shall be allotted to the first party exclusively.

(b) The property described in the second schedule shall be allotted to the second party exclusively.

(c) The property described in the said third schedule shall be allotted to the third party exclusively.

4. The parties hereto have proposed to effect and record the said partition in the manner following:

 

Now this deed witnesseth that

1. Each party hereto grant and release all his/her undivided share, right, title and interest in the property allotted to the other so as to constitute each party the sole and absolute owner of the property allotted to him/her.
2. Each party agrees that they will get the deed executed and registered and will equally share expenses involved in the process.
3. Each party agrees that they will not cause any hindrances or claim and right on the share they have agreed to give up through this partition deed.

 

Schedule A

(Details of Undivided properties belongs to Joint Family)

Sl.

No.

Description of the property

1

2

3

4

FIRST SCHEDULE

(Property allotted to the share of Sri.__________________________First party)

SECOND SCHEDULE

(Property allotted to the share of Sri.__________________________Second party)

THIRD SCHEDULE

(Property allotted to the share of Miss_________________________Third party)

WITNESS:

1. FIRST PARTY
2. SECOND PARTY
3. THIRD PARTY

See also: All about GST on flat

 

Deed of partition format in Hindi

 

 

To download PDF format, click here.

 

Legal updates

Consent from all co-owners must for partition deed to be valid: SC

A partition suit of a joint property will only be legally binding only if it has the written consent of all parties concerned, says the Supreme Court. While adjucating an appeal in the in Prashant Sahu and others versus Charulata Sahu and others, the apex court said that consent of only some co-owners is not enough to give partitions suits a legal status.

Read full coverage here.

 

Family property received by Hindu woman through partition deed is not inheritance: HC

An ancestral property received by a Hindu woman through a registered partition deed will not qualify cannot be termed inheritance under the Hindu Succession Act, the Karnataka High Court has ruled. Consequently, such a property will not go back to the heirs of the woman’s father upon her demise, the HC added.

Read full coverage here.

FAQs

Can partition deed be challenged?

Yes, a partition deed can be challenged.

What is partition in a house?

A partition deed can be used as a legal instrument, to divide a property among the co-owners.

Is verbal partition of property legally valid?

The partition will be valid, as long as a written memorandum of agreement has been signed among the family members pertaining to the partition. This document need not be registered.