Joint ownership by gift/sale/...

Prem Dhawan (Querist) 20 May 2024 This query is : Resolved
My Bhabhi is the owner of a small (DDA) plot in Delhi, as in the current deed.
The objective is to add my wife as the joint owner.
Can my Bhabhi gift 50% to my wife through gift deed? Will the new name added or a new deed will be made or the current deed and gift deed will go together or ....?
Should my Bhabhi make a sale deed to sell 50% of the property?
Or something else?
There is no issue in the family.

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This discussion explores adding a joint owner to a property through a gift deed or sale deed. It clarifies that a gift deed is often preferable as it may incur lower stamp duty and avoid capital gains tax for the donor. The process involves registering the deed, which requires specific documents and the presence of both parties. Importantly, once a partial ownership is transferred, it is recorded, preventing the original owner from secretly selling the entire property without the new owner's involvement.

T. Kalaiselvan, Advocate Online

(Expert) 20 May 2024
She can transfer 50%of the property to her by a registered deed, it may be a gift deed or a sale deed.
After that your wife will become a joint owner of the property with equal share in it at par with your sister in law.

Prem Dhawan (Querist) 20 May 2024
Because sale deed and gift deed both are possible, which one should we choose?
Is there any issue in gifting in the above relation? Will there be any tax in this scenario?
Or is it better that Bhabhi gifts to me or my son?

T. Kalaiselvan, Advocate Online

(Expert) 20 May 2024
By transferring the property by executing a registered gift deed, the stamp duty may by payable as applicable to gift deeds which comparatively would be lesser compared to sale deed, of course the rate of stamp duty would depend on the state where this proposed transfer takes place because the stamp duty is state subject and will differ from one state to another
The stamp duty for transfer by sale deed would be slightly higher than the gift deed, besides by transferring it by a sale deed, the vendor would be liable to pay the capital gains tax as applicable which is not applicable for gift deed.

kavksatyanarayana (Expert) 20 May 2024
Yes. I agree with the views opined by the above learned expert sir.

P. Venu (Expert) 20 May 2024
Yes, gift deed could be executed for part or portion of the flat. Stamp duty varies from State to State. Many a State provides for concessions in stamp duty when the gift is made in favour of a blood relation or a close relative. However, to my knowledge, the donee in the instant case is not such a relative.

Prem Dhawan (Querist) 20 May 2024
Thank you for the answers.
Kindly give a brief idea on how to execute the gift deed, and the time (days) needed.
My understanding is that its as simple as the two parties appearing in front of the registrar along with the written gift deed and stamp paper (taking into account the stamp duty).
What sort of supporting documents are needed (apart from the ID proofs)?
Can these papers be prepared many weeks/months in advance or have to be made only a few days before signing/registration?
Is any prior appointment with registrar needed?
Is the final registered gift deed to be collected after a few days or on the same day?
Should both the parties be present to collect the deed or only one party is sufficient?
Can the whole process be completed in a few days (a week)?

T. Kalaiselvan, Advocate Online

(Expert) 20 May 2024
The gift deed can be prepared either by a lawyer or a deed writer.
A prior appointment for registration of the deed should be obtained online.
A deed executed should be registered within four months of its execution.
The supporting documents are the link title documents, revenue records, mutation records, identity proofs etc.
The registered document can be collected by the donee.
It will take a few days to obtain the registered document.

Prem Dhawan (Querist) 21 May 2024
Thank you again.
Should the title document, revenue records, mutation records be submitted in origianl or copy (may be attested copies)?
I was under the impression that gift deed execution and registration is the same, but it is not, based on your reply.
Where is the deed executed and where is it registered, for example both may be done at the registrar's office?
Can the deed be submitted for registration immediately after its execution, on the same day and at the same office?
Should doner and donee both be present for registration, or only doner is sufficient?
Can the doner collect the deed after its registration, or it has to be collected by the donee?

T. Kalaiselvan, Advocate Online

(Expert) 21 May 2024
The copy of documents will be sufficient but you may have to deliver the original documents to the donee.
Both execution and registration can be done in the registrar office itself. It can be done on the same day.
Both donor and donee need to be present.

Prem Dhawan (Querist) 22 May 2024
Thank you again.
Because the doner will have the original sale deed, will the doner be still able to sell the property in future, without informing/involving the donee?

T. Kalaiselvan, Advocate Online

(Expert) 22 May 2024
If the donor had transferred only 50 % of the property by the registered deed in favor of the donee, then the original deed shall be in possession of the donor only.
If the donor desires to sell the remaining part of the property, which still remains undivided, then the donor can very well sell the undivided share in the property.
The buyer than can file a suit for partition to divide the property and claim his share in the property with separate possession.

P. Venu (Expert) 23 May 2024
The lengthening thread suggests deeper issues. Please post complete facts.

Prem Dhawan (Querist) 24 May 2024
Thank you again.
The situation and questions (including new questions) were posted in the posts above and I am grateful that experts (particularly advocate T. Kalaiselvan) have replied with kindness.

However I post my last question again because probably I was not clear enough.
My bhabhi currently has the sale deed of the plot in her name (sole owner in the deed).
After the gift deed is executed and registered (50% share given by my bhabhi to my wife)), will the current sale deed which is in bhabhi's name (sole ownership) continue to exist as it is (sole ownership)?
If the current deed will continue as it is (with my bhabhi as the single owner), will my bhabhi be still able to secretly sell 100% of the property in future, without informing/involving the donee (behind donee's back) and thereby keep all the money (for 100% of the property)?
How will the future buyer come to know that the property has joint ownership (my bhabhi and my wife owning 50% each)?
How is 50% share of donee protected (from secret sale by the donor)? What will donee have apart from the gift deed which gives 50% to the donee?
How will the donee (my wife) be able to sell 50% of her share?
As before, there is no dispute in the family. Nevertheless I am trying to understand the facts so that my wife's (donee's) share can be protected.

If you suggest I will start a new thread with these queries.

T. Kalaiselvan, Advocate Online

(Expert) 24 May 2024
After your sister in law had transferred 50%of her property in favour of your wife, her ownership in the property is reduced to half share which will be reflected in the encumbrance certificate.
Even though she will be retaining the original title deed, she cannot claim ownership over entire property in view of the entry in the encumbrance certificate.
Your doubts are unnecessary because the registrar will not entertain her claim for entire property if she attempts to sell it by a registered sale deed as she is left with only half share in the property.

Prem Dhawan (Querist) 24 May 2024
Thanks a lot, advocate T. Kalaiselvan.

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