Immovable property can be transferred from one person to another in India with the help of five legal instruments, under the provisions of the Transfer of Property Act. This guide will help you understand these legal instruments.
Suggested read: All about Transfer of Property Act
Sale
During a sale, a property is transferred from one person to another through a sale deed. The seller of the property receives a consideration from the buyer. The buyer is liable to pay stamp duty and registration charges, to register the sale deed. On the profits earned through the sale, the seller pays capital gains tax.
Suggested read: All about sale deed
Gift
A property owner is free to gift his/her property through a gift deed. Unlike a sale deed, the giver of the gift does not receive any monetary consideration. A gift deed must be registered, after payment of the applicable stamp duty and registration charge, to be legally binding. A gift deed comes into effect as soon as it is executed.
Suggested read: All about gift deed
Will
An absolute owner of a property is free to give his/her property through a will. While registration of a will is not mandatory, it is ideal to register a will to give it legal sanction. Unlike a gift deed, a will comes into effect on the demise of the will-maker. A will-maker is free to change the will as many times as they like during their lifetime. The one receiving the property through a will is not liable to pay any taxes.
See also: What is probate meaning when it comes to a will?
Partition
A jointly-owned property can be transferred among the members through a partition deed. After the division through a partition deed, each member becomes the independent owner of his/her share of the property. A partition deed must be registered and stamp duty and registration charge should be paid on the transaction. However, property partition does not have any capital gains tax applicability.
Suggested read: All about partition deed
Relinquishment
A jointly-held property can be transferred by giving up the right in a property through a relinquishment deed. A relinquishment deed is executed when a property owner dies without leaving a will and the legal heirs decide to give up their right to the property in favour of a co-owner. However, the transfer of rights through a relinquishment deed is possible only for inherited properties. A relinquishment deed must be registered for legal validity.
Suggested read: All about relinquishment deed
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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