Amitabh Bachchan has gifted one of his properties to his daughter but so can you
Jayshree Navin Chandra and Mona Dewan
There have been several instances of high net worth individuals and celebrities gifting their property to their children or grand-children. Bollywood star Amitabh Bachchan recently gifted one of his Juhu bungalows to his daughter Shweta. Some media houses have reported that Ranbir Kapoor plans to have his new bungalow registered in the name of his daughter, Raha. But so can you.
Also Read: Big B hands over ₹50-crore Pratiksha bungalow to daughter Shweta as a gift
A gift of an immovable property is one of the modalities for transfer of certain existing immoveable property in favor of another without exchange of money consideration. The essence of a gift is that it is done voluntarily by the donor out of love and affection for the donee.
Here’s why some people gift a property rather than will it
One of the important considerations behind such decisions to gift during one’s lifetime could be to hand over the property to the intended beneficiary and to give finality to estate plan regarding one’s assets during their life time and avoid legal hassles that come with inheritance and mutation and further to avoid family disputes and litigation among the legal heirs.
Transfer by way of instrument of gift that is duly executed and registered is quite difficult to challenge in comparison to bequest of property by way of WILL where often the beneficiary(ies) is/are left to struggle with establishing the authenticity of the WILL so that the mutation can be effected in the municipal records.
The discussions around the possibility of introduction of inheritance tax is also doing the rounds. There have been news reports saying that the government may be contemplating imposition of inheritance tax on assets inherited through intestate or testamentary succession. Parents are judiciously planning and structuring their estate keeping in mind tax-efficiency and ease of intergenerational transfer of properties.
Some states provide waivers for gifting property
Several states have notified special stamp exemptions or rebates on the instrument of gift where such gift is from immediate blood relative or spouse. States like Maharashtra and Uttar Pradesh have prescribed nominal stamp duty charges and in Haryana stamp duty is completely exempted for transfer of property by way of gift to spouse or specific set of immediate blood relatives. This cost saving has led family members to consider gifting their flats, house, plots, commercial units or other immovable assets to their spouse or children.
Also Read: Looking to gift your wife an apartment this Valentine’s Day? Remember these tips
Here’s what you should keep in mind before gifting your property
The gift of an immovable property must be done by way of a written instrument (gift deed), signed by both the donor (who transfers his property) and the donee (who accepts such gift) along with two witnesses.
The description of the subject property and personal details of both the donor and the donee and the relationship between them should be clearly and unambiguously mentioned in the instrument of gift.
A donor can only gift his existing property and not a future property which is not owned by the donor at the time of execution of the gift as such transfer is void.
The stamp duty payable on the instrument should be assessed and duly paid prior to the execution of such instrument.
The applicable registration fee has to be paid at the time of registration of the same with the concerned sub-registrar having jurisdiction over the property. The title of ownership of the property passes to the donee only upon registration of the instrument of gift.
Once the immovable property is validly transferred under a duly registered instrument of gift, the transfer as a general rule is irrevocable and is binding on the donor.
Jayshree Navin Chandra is Senior Partner, ZEUS Law Associates and Mona Dewan is Managing Associate, ZEUS Law Associates. ZEUS Law Associates is a full service corporate commercial law firm. One of its areas of specialization is real estate advisory and litigation practice
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