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Manish Gangji Bhanushali (System Engineer)     06 April 2015

Gift deed society transfer fees

Respected Lawyers,

 

I am a resident of Mumbai. My aunty(Mother's sister) is gifting me a flat which is under a registered society,

Society is asking for society transfer fees. Is it legitimate to ask for transfer fees in case of a gift deed?

Pls advice.



 5 Replies

harish (Advocate)     07 April 2015

Yours is actually a case of gift from your aunty to you due to natural love and affection without exchange of any consideration amount. In such a case you are supposed to get executed from your aunty a register a 'gift deed' in your favour and your aunty is to submit the required letter of resignation from membership along with an undertaking/indemnity as required by law to the society. The society would be wrong in demanding any transfer premium as the issue of premium arises only in case of sale transaction where "consideration" is involved. In your case there is no question of sale of flat to a third party as your aunty is a holder / owner of the flat and she has relinquished her rights in your favour by executing a gift deed in your favor. By virtue of Bye-laws 38(e) (ix), the society has every right to collect transfer premium but only on sale transactions within the limits as prescribed under the circular, issued by the Department of Co-operation from time to time. Such transfer premium even in the case of sale transaction is not applicable in case of transfers of shares and interest in the capital of the society if done within the members of the family. The question of the society not making you a member does not arise, as your aunty is holder /owner of the flat. If after you’re submitting the aforesaid documents the society does not do the needful you can approach the Dy. Registrar and make an application u/s 79 of the MCS, Act, 1960.

Applying the bye-laws which the society has accepted to your case:
1) You will have to pay Rs. 500 /-  as transfer "fee" to the society- be it gift deed or sale deed.
2) As far as the transfer "fees / premium" is concerned, the bye-law is loud and clear: If the transfer is within family (as per bye-law definition- family=mother, father, brother, sister, son, daughter, son-in-law, daughter-in-law), then the society CAN NOT demand the transfer "fees / premium"  not even as "donation" or under any other pretext.

Hence in your case, since it's a transfer between your relatives, you will have to pay transfer 'fee' of Rs. 500 and do not need to pay any transfer 'premium' or 'donation' or anything else to society at all.

And further in a recent news that  Govt. Waives Stamp duty on transfer of flat to kin - as reported in the Times of India issue dated 26.3.2015.

Mumbai: Immovable property — land, house or flat — can now be transferred to one’s children or blood relatives without paying stamp duty for registration. This will come as a major relief as families won’t have to pay a 5% of the ready reckoner rate of the property as stamp duty. Making the announcement, revenue minister Eknath Khadse said an affidavit on a Rs 100 stamp paper would suffice.

He later changed it to Rs 500 as the government no longer deals in Rs 100 stamp paper for property matters. In other decisions announced in the House on Wednesday, those with 500sq ft or smaller homes do not have to pay the increased property tax and the government will allow twice the transfer of development rights to a landowner in lieu of land surrendered for a public amenity. Replying to a discussion on the budgetary allocation for the urban development department, chief minister Devendra Fadnavis said the government is framing a new policy, wherein TDR will be indexed to the ready reckoner rate to “prevent developers earning a windfall from the use of TDR of one area in another. The RR rate of the area where it is being utilized will apply”. The decision to increase TDR was taken as the new Land Acquisition Act has increased compensation, he added. A construction amenity TDR or incentive TDR will be offered to a land-owner in addition to the regular TDR if he develops an amenity and hands it over to the local body. Khadse said the decision to waive stamp duty on property being passed to heir will cost the exchequer Rs 350 crore annually. “The ready reckoner rate for land and other property has gone up considerably even if the land does not sell at that rate in the market. We have received a large number of complaints, especially from farmers. They have been demanding to know why they should pay the government to transfer land to their

own children. Hence, we have decided to do away with the stamp duty,”

T. Kalaiselvan, Advocate (Advocate)     11 April 2015

Well advised and viewed by Mr. Harish.  I agree to his views. The latest ruling is yet to come into force, so any concrete opinion can be formed about it only when it comes into force.  News paper information will not be authentic enough, it may change even in the last moment. Thus the minimum transfer fee applicable is payable now.

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     26 September 2015

1.  "Family" means Group of persons which includes husband, wife, father, mother, sister, brother, son, daughter, son-in-law, brother-in-law, sister-in-law, daughter-in-law, grandson /daughter.


2.  Aunty (Mother's sister) is NOT covered under "Family", under the Society Bye-Laws.  Hence Gift Deed by Aunty will attract full Stamp Duty @5% plus Registration Fee (maximum 30000/-)


3.  The following is further applicable for transfer of Society membership:
a)  Membership Entrance fee = 100/-
b)  Membership Transfer fee = 500/-
c)  Share Transfer Premium = 25000/-


4.  For purpose of waiver of "Share Transfer Premium", the Flat buyer /purchaser should be within the defination of "Family" (as above), irrespective of Gift Deed or Sale Deed.


Keep Smiling .... Hemant Agarwal
Read Articles: https://hemantagarwal21.blogspot.in/?view=sidebar

HHM-HUF   19 November 2015

Having read  the posts and the discussion on the same I would like to add the following and then seek opinion from the house on the matter _

1) I agree with the views of Mr. Harish that transfer premium is not applicable in case of transfer by gift deed as there has been no financial transaction. The said bye law no 38 ( Bye Laws of the CHSL -2009) has mentioned the same very clearly in the note at the end of the bye law. 

2) Mr. Hemant Agarwal has mentioned correctly that stamp duty has to be paid at 5 % as per the definitions of the family members. In case the gift deed is executed in favour of the family members as mentioned the stamp duty shall be 2 %. Please correct me if I am wrong. However, I do not concur with his opinion in 3 (c) that the transfer premium has to be paid. Also opinion in No. 4 is that transfer premium is applicable irrespective of the gift deed needs to be subtantiated with some evidence as the Law 38 has just mentioned that transfer premium not applicable for gift deeds with out ant further explanation. Would Mr Agarwal help with any rules or laws supporting what he has stated. And does the house have any different opinion along with evidence if any.

3) In the entire melee of whether to collect or not to colect the transfer premium in a gift deed in the case of Mr. Bhanushali if the society does not send any correspondence to Mr Bhanushali for more than three months after his application for transfer after a registered gift deed - then can Mr Bhanushali ask for deemded transfer as per the law that if no communication is received then the flat is deemed to have been transferred.  

  a) In such an event of deemed transfer can the society still demand transfer premium or their right for the same stands forefeited in the event the house feels that premium is still applicable after discussion in point 2 above.

Thanks

Hemant (Freelancer)     28 February 2021

As per bye law 38 (ix) note transfer premium wavier is only in case of transfer “after his death” 

Hence transfer premium is applicable in all other cases be it a gift or sale or transfer in any other pretext.

Hemant Vyas

 


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