Sale deed or gift deed for an old flat , legal heirs involve

It is beleived that all in deceasd Ex. owner family are Hindu.

The Flat is under soe Co-op housing Society?

Was there any nomination made in society for the said flat?

Confirm!

Originally posted by : Kumar Doab
	It is beleived that all in deceasd Ex. owner family are Hindu. The Flat is under soe Co-op housing Society? Was there any nomination made in society for the said flat? Confirm!

Yes.Hindu

No..it;s a flat in a complex and indvidual registrations done for flats..no society system here....No nominations as such..

1.  Please indicate, as per Agreement to Sell, in what mode the consideration was paid (whether by cheque or cash).

2. First check up with the Sub-Registrar's office concerned in Kolkatta, the stamp duty that would be requied to be paid on execution of Sale Deed (with reference to the Agreement to Sell) now.  It is necessary to find out whether they would be agreeable to accept the stamp duty on the value of consideration shown in the Agreement to Sell which was 26 years old, or would insist on payment of stamp duty on the current market value of the property.  

3.  The suggestion to get first Gift Deed and then exexute it is a STUPID idea.  Why Gift Deed?  Gift from whom to whom?  

4.   You say: "one lawyer says to get a sale of agreement done between my mother and legal heirs showing a less amount to avoid tax ..property value would be around 60 lakh but the agreement would be for 4/5 lakhs...because there is no monetary transaction involved but a cash receipt of 5 lakhs would be good enough as the legal heir would not need to pay any capital tax.." 

If the sub-registrar's office is ready to register the Sale Deed by charging stamp duty based on the consideration (Rs. 4/5 lakhs) as shown in the Agreement to Sell, then the need for showing less value etc., to avoid tax does not arise.

This is for the simple reason that, as per Section 43CA of the Income Tax Act, if part of the consideration has been paid otherwise than by way of cash, then the consideration shown in the Agreement to Sell can be taken into account for the purpose of Capital Gains Tax.

Originally posted by : R.Ramachandran
	1.  Please indicate, as per Agreement to Sell, in what mode the consideration was paid (whether by cheque or cash). 2. First check up with the Sub-Registrar's office concerned in Kolkatta, the stamp duty that would be requied to be paid on execution of Sale Deed (with reference to the Agreement to Sell) now.  It is necessary to find out whether they would be agreeable to accept the stamp duty on the value of consideration shown in the Agreement to Sell which was 26 years old, or would insist on payment of stamp duty on the current market value of the property.   3.  The suggestion to get first Gift Deed and then exexute it is a STUPID idea.  Why Gift Deed?  Gift from whom to whom?   4.   You say: "one lawyer says to get a sale of agreement done between my mother and legal heirs showing a less amount to avoid tax ..property value would be around 60 lakh but the agreement would be for 4/5 lakhs...because there is no monetary transaction involved but a cash receipt of 5 lakhs would be good enough as the legal heir would not need to pay any capital tax.."  If the sub-registrar's office is ready to register the Sale Deed by charging stamp duty based on the consideration (Rs. 4/5 lakhs) as shown in the Agreement to Sell, then the need for showing less value etc., to avoid tax does not arise. This is for the simple reason that, as per Section 43CA of the Income Tax Act, if part of the consideration has been paid otherwise than by way of cash, then the consideration shown in the Agreement to Sell can be taken into account for the purpose of Capital Gains Tax.

1. As per the previous agreement of sale, it was paid in cash...however please dont be confused that the previous and old agreement of sale has nothing to do anything NOW because we are starting everything from fresh here as in we are dealing with the legal heirs with a fresh and new agreement ( Sale or Gift) we will have to decide..

2. The current value of the flat is around 50-60 lakhs but the agreement of sale now would be done for 4 lakhs as full consideration because the legal heirs want to dispose this flat to us at a low price,,,so the old agreement of sale has nothing to do here...but will have a new agreement prepared...

3. Gift deed is suggested because ideally no monetary transactiion is happening now so whether a sale agreement for a 50-60 lakh flat can be prepared and presented showing a consideration of 5 lakhs now as it would look something suspicious or better prepare a gift agreeement from the legal heirs to my mother of other than blood relation and we are ready to pay the registraion and stamp duty ..

4. We will prepare a new agreement of sale if required and would not consider the old one to avoid capital gains tax...

1. If it is going to be a fresh agreement, THEN, you have to show the current market value of the property for Sale Deed registration purposes and pay the applicable stamp duty accordingly.  THERE IS NO ESCAPE ROUTE.

2.  The question of showing the consideration very los (than prevailing market price) will not help in avoiding the applicable stamp duty as per prevailing market price.

3. In the Income Tax front, the fair market value on which stamp duty is being paid, will be taken into account for the purpose of calculating the Capital Gains Tax in the hands of the seller.

4. Since the actual consideration (if you show very less amount say Rs. 5 lakhs) is less, the difference between the fair market value Rs. 60 lakhs and actual consideration Rs. 5 lakhs, which works out to Rs. 55 lakhs will be treated as "Income from Other sources" in the hands of you (the purchaser) and charged to income tax accordingly.

5. Since according to you the consideration shown in the Agreement to Sell was paid through Cash, the benefit of Section 43CA mentioned by me in my earlier post will not be available, and the Capital Gains tax will be calculated on the current prevailing market value.

6.  The position told at point 4 and 5 above will apply as far as you (buyer) is concerned in regard to Income Tax.  However, since it is a Gift, the donor (legal heirs) will not suffer any income tax.

7. But applicable stamp duty is to be paid as per State Government norms.

I am afraid, you are thinking in Silos, rather than on a holistic way.  Unless you consult a trained legal brain, you are sure to land in problem.

In simple words, we are ready to pay the stamp duty,registration fees on current market value but what should be agreement between us where the legal heirs should not have any tax burden or any kind of problem because there's no monetary transaction happening between us..they are ready to transfer their father's flat free to us..because they know their father sold this flat to my father 26 years back...

Originally posted by : Ramesh Singh
	Sir, what's your real/actual problem?

Not being able to understand how to start the process...should I get the power of attorney of the brothers staying in hyderabad done on their sister's name who is staying in kolkata and then go for sale or gift agreement or should I get a sale or gift agreement involving all 3 legal heir's and then get a POA

Wther it will be a sale or a gift agreement as they are transferring the flat to non-blood relation...

Originally posted by : Ramesh Singh
	Transfer the property as per unregistered sale deed by paying requisite stamp duty & penalty. Document required: 1) Death Certificate. 2) Succession Certificate. 3) Conveyance Deed. 4) Special power of Attorney. 5) Latest property tax paid receipt. 6) Copy of unregistered sale deed. 7) Transfer instrument. 8) Application. For tax implication, check locally or follow gov. portal of your state. Gift deed upto valued Rs. 50,000/- is exempted outside blood relation, which is not applicable in your case.

1) Death Certificate.- Ex-Owner and Ex-Owner's wife's DC is there
2) Succession Certificate. - Not there and how to get it as I am sure the legal heir's wont be having it as well...
3) Conveyance Deed. - Is it the registry deed done by the ex-owner with the registrar's office..I just have a certified copy and not the original
4) Special power of Attorney.- Will have to ask them to get it from local Hyderabad sub-registrar office..
5) Latest property tax paid receipt. - We have the NOC since my father was paying the corporation tax since 26 years..
6) Copy of unregistered sale deed. - I just have the xerox copy of the sale deed between my father and the ex-owner..
7) Transfer instrument. - What transfer instrument and how to get it??
8) Application. - Confused..what kind of application..Sale of Gift??

Can you tell or calculate what could be the penalty...
 

You say: "In simple words, we are ready to pay the stamp duty,registration fees on current market value but what should be agreement between us where the legal heirs should not have any tax burden or any kind of problem because there's no monetary transaction happening between us..they are ready to transfer their father's flat free to us..because they know their father sold this flat to my father 26 years back..."
 

There is no escape from paying capital gains tax by the legal heirs, once the market value of the property is adopted for stamp duty purposes.  To simply put, the legal provisions do not sub-serve your wishes.

The deceased owner (seller; Hindu male) in his life time had signed an agreement to sell, obtained consideration, handed over possession to buyer.

Usually relevant points are narrated in agreement to sell e.g; Total consideration, tile to pay and register the sale deed, possession of property, in case of death legal heirs shall honor the agreement etc etc …..

Relate what is narrated in IT.

YOu have posted that photocopy is available and there is NO confimation on availability of original 

In case of Hindu male that has died without disposing self acquired property owned by him by a valid/registered deed/WILL; The 1st right for equal share is of his ClassI legal heirs i.e Mother ( if alive as on date of death), Wife ( if alive as on date of death), sons, daughters……….. The share in ancestral property devolves upon his legal heirs.

You can determine the share of each legal heir accordingly and see how and how much gets  vested in each.

The process and procedure to get share updated in mutation records is simple.

The authority under whose jurisdiction property falls has a set procedure for such matters if NO WILL has surfaced; Intestate Succession…….and the prescribed forms, procedure, process is available in O/o Authority and even on website. Certified copies of the death certificate, legal heir certificate/affidavit (per local procedure/precedence) are basic requirements.

The authority shall update share as per provisions of personal law that applies in mutation records….. e.g; Mitākṣarā, Dayabhaga school…..

By the updated mutation records the legal heir(s) attain rights equal to that of owner and can enjoy/dispose the property/share like owner.   The only thing remains is partition by boundaries. That can be achieved either amicably or thru court.

In your query you have posted that the legal heirs are willing and you are in hurry.

The legal heirs obtaine Death Certificate, legal heir certificate/affidavit, Succession Certificate, LoA etc for other purposes estate of the deceased…….from MM, respective Taluk/Tehsildar, Distt. Courts, etc etc in respective states………….

You may check with legal heirs…

Thereafter the legal heirs submit the requisite forms/docs to authority under whose property falls to update ownership by inheritance…in mutation records….

The legal heirs are declared by respective certificate/procedure in respective states per procedure……….e.g; The local counsels well versed with LOCAL procedures, revenue matters may advise Title declaration suit , Succession Certificate….

Since Legal Heirs are willing let them affirm and confirm the photocopy of agreement to sell and you may agree to bear the cost of stamp duty/charges………..

The stamp duty/charges are state subject and min. is circle rate/revenue rate…………that you can confirm from local SRO…….irrespective of sale consideration ( decided Rate between buyer and seller) say even if IT is below circle rate/revenue rate…………………or if IT is market rate that can be above circle rate/revenue rate…

Your counsel may opine that the legal heirs may agree to give PoA to one of the legal heirs to execute the sale deed………..by paying penalty for late registration of sale deed………………

Gift is without consideration…

Since the consideration to sell has already been paid then how and on what grounds your counsels has opined Gift deed as an option………….

Moreover the duty/charges of Gift deed o Non blood relative may be as high as sale deed………..The difference may not be that high….

Moreover why should anyone take a risk…………and defective approach…………

You are getting property @peanuts……….and legal heirs are willing.

These are two merits alone that you should consider/jump at and complete the legitimate process……………

Get in touch with a very able senior LOCAL counsel of unshakable repute and integrity specializing in revenue/property/civil matters nd having a successful track record in such matters…………..

Instead of bothering too much for penny by penny and FEE of an expert counsel well versed with local revenue codes/procedures…………………go for proper procedure and complete IT ASAP.

Any kolkata property lawyer from this forum??