One of the biggest benefits why in a family, a husband may register a property in his wife’s name – to avail the stamp duty rebate that many states offer. But, merely by having a property in the name of the wife makes her the owner of the property? This query is not as simple as it appears to and in this guide, we look out for an answer to this. Read on.
What is stamp duty and registration of a property?
When a property is bought or gifted, then there is a transfer of ownership of the property. This has to be registered in the legal records of the government. By doing this, the owner gets to avail the many tax concessions offered by the government. Additionally, he gets support in case of a property dispute, since the property is legally registered.’
Why does a husband register a property in wife’s name?
A husband registers a property in wife’s name to avail the following benefits.
- Rebate on stamp duty and registration charges
Many states in India offer a 1-2% lower stamp duty for women as compared to men. Since stamp duty is a big part of the property value, using this benefit results in significant savings for the family.
- Lower home loan interest rate
Many banks and non-banking financial companies (NBFCs) offer a lower rate of interest to women home loan subscribers. Thus, if a property is registered in a female’s name, one can avail of the lower and cheaper home loan interests. Because of the various rebates on home loans including lower rate of interest, one can save significant annual savings.
- Tax benefits
The income tax department also has created different tax slabs for women who buy property in their names. Note that under Sections 80c and 24b of Income Tax Act, interest and principal payments on a home loan are deductible. These deductions help in financial savings that can amount to a big amount for a family.
- Better credit score:
With a property in her name, the wife’s credit score will be much better. Also, with a property in her name, the wife can take other loans in future easily.
Can a woman whose name the property is registered claim sole ownership of it?
A property in a woman’s name empowers her to take her financial decisions and independence. Real estate is one of the best asset classes to invest in that will keep the woman and her family financially secure and protected. However, can a woman claim sole stake of ownership just because it is registered in her name? No and yes.
When can a woman not claim sole ownership of a property registered in her name?
According to a recent ruling issued by the Allahabad High Court, if a property that has been registered in the wife’s name who is a homemaker and has no specific source of income and the property in question has not been purchased using her hard earned money, then it will be considered as family property. The high court observed that many women are dependent on their husbands for financial assistance. The husband buys properties in the wife’s name from his own income to avail benefits of buying a property in a woman’s name.
A case in point was that of Saurabh Gupta who had filed a civil case with the Allahabad High Court seeking declaration that he is 1/4th co-sharer of the property bought by his deceased father in his mother’s name. The mother (wife of Saurabh’s father) transferred property to a third party’s name after her husband’s death as the property was in her name. Since she had no income of her own, it was ruled that the property did not solely belong to the wife and had to be considered as a family property. Note that under Hindu Succession Act, 1956, after the husband’s death, the wife and the children get the same rights in a property. In case the husband has not made any will, then the wife will also get a share of the property. She is not legally allowed to sell the property or transfer it to a third person as there are other stakeholders to it.
When can a woman claim sole ownership of a property registered in her name?
A woman can claim sole ownership of property registered in her name if she has paid for the property with her own hard earned money. In this case, the woman is the sole owner of the property and can transfer it to any third party if she wishes to.
Housing.com POV
A property when bought and registered under a woman’s name has many financial benefits attached to it. These help a family with significant savings, especially if it is a single income household. The savings in home loan interest, stamp duty and registration charges and the tax benefits are significant that help the family’s financial status. However, a property that has no valid proof of being purchased using a wife’s income is not the sole property of the wife but is a family property.
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