Gifting Property to Close Relatives
BHUPAL SINGH
(Querist) 26 August 2010
This query is : Resolved
Dear Ld Sirs,
We own a commercial flat in Multi Storey
Lease Hold Commercial Building in Delhi. My son is a co-owner. He wants to Gift his share to me throgh a Gift Deed u/s 56(2)(vi) of I.Tax.
The system in Multi Storey Lease Hold Commercial Buildins is that The Mainte-nance Cell of the Builder endorses the name of the New Buyer or Transferee(in case of Gift or Death of a co-owner)in a Book know as" Flat Buyers Book ". The New Owner then gets the Mutation done in his name through the MCD Property Tax Depart-
ment by paying Stamp Duty. The New owner
pays Ground Rent/Insurance etc to the Builder who the pays to DDA & Ins Coy etc.
My questions are--
a.Is it necessary to get the "Gift Deed"
Registered with Sub Registrar Office ?
If so, is the presence of Donor ( my
son )required ?
b.Since my son is staying abroad and he
cannot come right now,can we make the
Gift Deed now by getting his signatures
by post and get it Regd later on when
he visits India ?
c.Will we have to pay Stamp Duty again
since we have already paid the Stamp
Duty to the MCD at the time of purchase?
d.If we have to pay the stamp Duty again
will it be for the entire property
or only for the share being gifted ?
e.What will be the rate of Stamp Duty in
case of Gift to Cose Relative ?
f.If we do not get the Gift Deed Register-
ed, will I.Tax Deptt have any objection?
I will appreciate an immediate advice ?
B.S. Arora
BHUPAL SINGH
(Querist) 26 August 2010
Dear Ld Sirs,
Kindly add the following to my enquiry--
The salepurchase is made through " Agreementt to Sell" and No Sale Deed is made, since the property is Lease Hold.
B.S. Arora
A V Vishal
(Expert) 26 August 2010
a.Is it necessary to get the "Gift Deed"
Registered with Sub Registrar Office ?
If so, is the presence of Donor ( my
son )required ?
Ans. Yes, the gift deed needs to be registered without whih the gift is void.
Your son must be present to execute the gift deed or appoint an attorney for the same.
b.Since my son is staying abroad and he
cannot come right now,can we make the
Gift Deed now by getting his signatures
by post and get it Regd later on when
he visits India ?
Ans. It is not advisable since the document must be registered within 4 months of execution or it will attract penalty.
c.Will we have to pay Stamp Duty again
since we have already paid the Stamp
Duty to the MCD at the time of purchase?
Ans. Yes, a nominal amount of stamp duty must be paid on gift of the property.
d.If we have to pay the stamp Duty again
will it be for the entire property
or only for the share being gifted ?
Ans. Only on the value of the gifted property.
e.What will be the rate of Stamp Duty in
case of Gift to Cose Relative ?
Ans. The stamp duty differs from state to state.
f.If we do not get the Gift Deed Register-
ed, will I.Tax Deptt have any objection?
Ans. Since the gift itself is void, the income arising out of the property will be assessed to the original owner and assessed accordingly.
s.subramanian
(Expert) 26 August 2010
Now what you own is only a leasehold right under the sale agreement. It can be assigned in your favour by your son by a deed of assignment . Gift of such a right cannot be made. You have pay stamp duty for the assignment of leasehold right of your son's share.
Mr.Vishal's advice is very educative and wonderful. Perhaps,the second part of your query where you have stated that it is only a leasehold right,had not reached him before he gave his opinion.His advice seems to have been based only on the first part.
Uma parameswaran
(Expert) 26 August 2010
Gift deed could not execute with agreement to sell.
A V Vishal
(Expert) 26 August 2010
A leasehold property cannot be gifted unless its tenure is changed into freehold. A leasehold property always remains property of the lessor. However, the Leasehold Rights can be gifted with the prior permission of the lessor.
s.subramanian
(Expert) 27 August 2010
Yes. I agree with Mr.Vishal.
BHUPAL SINGH
(Querist) 27 August 2010
Dear Sir,
I am really grateful to all of you, especially Sh. AV Vishal & Sh. SS Subramanian for the valuable and timely advice.
2. May I request further clarification on the following 2 points--
a. When we bought the property, we got
the mutation done in our favour though
MCD and paid Stamp Duty through MCD Pro-
perty Tax Department. Now if the Assign-
ment Deed has to be made, as I have
understood, we will have to get the
Registration done in the Office of the
Sub Registrar. Where shall we pay Stamp
Durty then??? Will it be Office of Sub
Registrar or MCD ????
b. What is the present Rate of Stamp
Duty in this case ( Assignment of
rights of his share by son to father of
lease hold property) ????
