Immovable property is a transferable asset. This means that the owner of a flat, independent house, bungalow, land parcel or plot is free to transfer his ownership to another person. The giving away of this ownership is known as property transfer.
What is property transfer?
The Transfer of Property Act (ToPA), 1882, defines property transfer is “an act by which a living person conveys property in present or in future to one or more other living persons or to himself or to himself and one or more other living persons”. Living person also includes a company or association or body of individuals.
Types of property transfer in India
According to Gurgaon-based legal expert Brajesh Mishra, there are several ways in which an owner can transfer his right in a property to another person. The most commonly used methods of doing so include:
- Sale
- Gifting
- Partition
- Exchange
- Relinquishment
- Release
- Through a Will
- Mortgage
- Actionable claim
Who can transfer property?
A person of at least 18 years of age and of sound mind can transfer property under Section 7 of the Transfer of Property Act.
‘Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property, either wholly or in part and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force,’ it says.
Tax on property transfer in India
Depending on the type of property transfer and the instrument involved, the person making the transfer and the person in whose name the transfer is made must pay taxes to the government. These taxes come in the two forms. In case of a sale deed, the buyer is liable to pay:
- Stamp duty
- Registration fee
- Mutation fee
The seller on the other hand pays to the income tax department, capital gains tax on the profit made through the sale.
Can you transfer property you expect to inherit?
The answer is in the negative. One cannot transfer a property that one expects to inherit in future, under the provisions of the Transfer of Property Act.
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