Transfer of joint ownership
Pawan
(Querist) 27 August 2011
This query is : Resolved
Hi,
I have a property in Mumbai which is a joint ownership with my elder brother. We now would like to remove a name from the property.
I need to know how do we do this. What is the catch if the property is trfd of one of us then in that case how should we do this. How much / what kind of tax he would have to pay in the current financial year.
Regards,
Pawan
Guest
(Expert) 27 August 2011
YOU CAN PURCHASE THE SHARE OF THE OTHER PERSON BY ANOTHER SALE DEED.
THE OTHER PERSON CAN EXECUTE A RELEASE DEED.
YOU CAN MAKE PARTITION DEED
YOU CAN GIVE GIFT TO YOUR BROTHER.
IS SALE DEED EXECUTED IT WILL REFLECT IN NEXT YEAR. IF IT IS GIFT NOMINAL ONE.
prabhakar singh
(Expert) 28 August 2011
Expert S.GANESAN HAS WELL DETAILED ALL OPTIONS AVAILABLE TO YOU.
Pawan
(Querist) 29 August 2011
Hi Mr.Ganeshan,
Thank you for your response. If I/my brother are making a release deed,what is the process for this. Also the will the deed mention that the share released is going to the other person. Will this also call for gift tax as its more like an income which one of us will recieve from the other.
R.Ramachandran
(Expert) 29 August 2011
A simple Registered relinquishment Deed in favour of the other will be the best option.
It may involve nominal stamp duty and registration charges.
Such a relinquishment would not attract any Gift Tax under Income Tax Act, since the gift is coming from a 'relative' and the term 'relative' includes brother or sister of the individual.
Direct GIFT Deed would involve normal stamp duty and registration charges as applicable to conveyance of immovable property.
Similarly if the property is transferred by means of a Sale Deed, it will also involve stamp duty and registration charges as applicable to conveyance of immovable property. More over the person transferring the property will be liable to pay Long Term Capital Gains Tax if there is any profit that he derives from the sale. LTCG is the difference between Sale proceeds MINUS the indexed cost of acquisition.
Pawan
(Querist) 29 August 2011
Hi Ramachandran,
Thank you for your reponse. SO if've understood correctly a relenquishment deed is the best one. Is there another term for this, casue I'm sure ppl wouldnt know. Also if one of us is making the deed in favor of the other, then the person who is recieving the other half will have to pay tax??
R.Ramachandran
(Expert) 29 August 2011
The relinquishment deed can be called "Release Deed" or in Hindu "Hakkasod Patra".
The person receiving the property will not be liable to any tax for the simple reason that it is between two brothers, who are 'relative' and as such exempted from income tax.
Pawan
(Querist) 29 August 2011
Thanks Ramachandran. I appreciate your promt response.
So once the release deed is signed off. What happens to the sale deed which is on both the brothers names
R.Ramachandran
(Expert) 29 August 2011
Once the Relinquishment Deed is registered, then on the basis of the Regd. Relinquishment Deed, you can have the entire property mutated in your name (your brother's name will be deleted).
Thus, the original sale deed (where both your names are shown) coupled with the Regd. Relinquishment Deed will establish that you are the absolute and exclusive owner of the property.
Pawan
(Querist) 29 August 2011
Ohhh interesting. thank you so much Ram. You've made my day. I really appreciated the way you responded. Thank you again. Now I have to start the process of removing the name. Thank you so much
