K (N/A) 11 May 2014

Giving up share on inherited property to sister

Dear Sirs/Madam

My sister and I are the sole legal heirs of my deceased mother's property. My father is also deceased.

My sister is willing to purchase the property from me as per market value. What is the best way to execute this with minimum tax implications?

Will I be liable to pay Capital Gains Tax or any Gift Tax?

Should I give up my rights of the property without consideration, for the purpose of registration?

As my sister and I have agreed upon a price, should I document it for Legal purposes (like an agreement)

Awaiting your esteemed response..

Thank You

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7 Replies

kavksatyanarayana (subregistrar/supdt.(retired)) 11 May 2014

go for relinquishment deed. where the property is situated? the stamp duties are different from one state to another state.

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K (N/A) 11 May 2014

Thank you for your response The property is situated in Cherpu, Kerala Kindly let me know what the stamp duties are

T. Kalaiselvan, Advocate (Advocate) 14 May 2014

It is better to execute a registered Release deed by relinquishing your rights of share in the property in her favor, this would minimise the stamp duty.

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K (N/A) 15 May 2014

Thank you for the response.. Although what is a Partition Deed? and how is it different from the Release deed?

As there will be monetary consideration involved in this transaction, which is the best way to go?

K (N/A) 16 May 2014

Also - Is a Release Deed the best option, as there is monetary consideration involved.

Will a Gift Deed be more applicable?

As my sister is an NRI it is tiresome to co-ordinate, and I do not live in Kerala too..

Kindly advise which is the best option

T. Kalaiselvan, Advocate (Advocate) 16 May 2014

Since you want to dispose the property to your sister for some amount of consideration, which in normal terms is known as sale deed, such a transaction would involve a heavier financial implication by way of stamp duty and registration charges. Instead, since this transaction is between the blood relations, it is advised that the property may be transferred to your sister's name either by a registered release deed or gift deed of your share in the property, this will involve lesser cost towards stamp duty than compared to any other means of conveyance of the property unto her. You may verify the stamp duty applicable for each of the transaction and then proceed.