Transfer of ancestral property and registration of transfer deed

Transfer-of-ancestral-property-and-registration-of-transfer-deed-India

Transfer of immovable property results in the conveyance of property rights, i.e. title, rights, interest in the property by one person to another. 

The property can be transferred by the person having rights to do so. Generally, it is the owner of the property or the person authorized to do so. 

Any document showing the ownership of the property/land in the name of a person is a title deed. E.g. in case of sale of a property, sale deed is the title deed.

In the case of ancestral property, the ownership is verified from the record of the land registration department. 

What is the ancestral property?

Ancestral property is the property which has passed on up to four generations, including the owner, without any division. The coparceners (a small unit of lineal descendants of a common ancestor within the undivided Hindu family) have a birthright in the ancestral property.

Read More: Property rights of a wife after husband’s death

Only the Karta of the family (Karta is the head of the Hindu Undivided Family) has the right to alienate the HUF property which may include the ancestral property under certain conditions.

Property inherited from maternal ancestors or obtained by Gift, or Will is not ancestral property.

Whenever a person inherits an ancestral property, it is essential to get it transferred in the name of the beneficiary in revenue records or municipal records.

Modes of transfer and transfer deed:

There are various modes of transfer of immovable property like transfer by sale, gift, lease, and mortgage. The transfer takes place vide instrument called transfer deed. As per the nature of transfer, the deed can be sale deed, lease deed, mortgage deed etc.

Read More: Property rights of the second wife and her children

Transfer of ancestral land:

Ancestral land can also be transferred. The coparceners who have right over the ancestral property can transfer their respective shares or interest in the property. If the ancestral land is divided among the family members or there is a partition of the property, the property ceases to be ancestral. The share which each member gets after partition becomes the self-acquired property.

There can be a transfer of share or interest by coparcener (co-owner) without actual partition of entire ancestral land. In some parts of the land, consent of co-owners, i.e. the consent of other coparceners, is required. There are other areas where the consent of other coparceners is not needed.

A coparcener can also transfer his share to another coparcener. 

However, in any case, the transfer deed must be registered as per Law.

Registration of transfer deed:

The registration of transfer deed can be optional or mandatory as per the Indian Registration Act.

Read More: Property Rights of Women as per Hindu Law

 In some cases, it is mandatory like: 

  • sale of immovable property if the value of the property exceeds Rs 100
  • Lease of immovable property if the lease period is more than 11 months
  • Gift deed

If the registration is compulsory, the transfer is not valid if the deed is not registered. It is always better to get the transfer deed registered. The process of registration helps to:

  • Create evidence of ownership
  • Records the transaction-related to a property for future references

The transfer deed transfers the right or interest in the property to another person called transferee. For a valid transfer, the deed must be registered as per Law. The land registry, i.e. the department for registration records the ownership for the public. Once the document is registered as per Law, it becomes the title deed, i.e. document showing the name of the person holding the title of the property. 

The property rights are mentioned in the record maintained by the land registry department.

Read More: The married daughters’ right in mother’s self-acquired property

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NRIs Alert! Buying property in India? The guidelines

NRIs-Alert-Buying-property-in-India-The-guidelines-1

What can be better for an NRI than having a hand in the growth and prosperity of his motherland? 

Perhaps nothing is better than it. It motivates NRIs to invest in India.

NRIs buy property in India as 

  • It helps them to stay connected to their roots
  • It is an investment opportunity 

Investment decisions are generally guided by profit motives and regular returns besides sentiments for some.

Buying property in India always involves a good understanding of the market conditions and the current economic scenario in the country chosen for investment.

Still, the decision is not easy. There might be a series of questions/queries in mind before deciding to invest in India, like:

Read More: HUF property and its partition by Coparceners

Where can you invest?

NRIs can buy any immovable property, whether residential or commercial. No permission is required to be taken from the Government of India or RBI. There is no need to intimate RBI about this transaction. There is no restriction on the number of residential or commercial properties which NRI can buy.

However, special permission of RBI is required for buying agricultural land, plantation property or a farmhouse in India. 

How to make the payment?

NRIs buying the property can make the payment

  • By remitting through proper banking channels from abroad.
  • By availing home loan for buying residential property, for the renovation of an existing property or construction on a plot– the loan amount will be transferred directly to the seller’s or developer’s bank account. The payment is made in Indian currency. 
  • By using funds in the NRE/NRO/FCNR accounts. Even housing loan if availed is repaid using funds from these accounts.
  • No payment by travellers cheque or foreign currency

Read More: Protection of inheritance rights of women and varying succession laws

What documents are required for buying a property?

Documentation part has become very easy to facilitate investment by NRIs. You need to have:

  • A valid passport
  • PAN card 
  • Latest photograph 

Other documents that are prescribed by RBI from time to time. 

Whether any loan is available for NRI for buying a property in India?

RBI has issued general permission to all banks to provide loan facility to the NRIs for purchase of property in India

Generally, a home loan is availed for purchase of the residential property.

In case of purchasing a house, general precautions like the title is definite, and the property is free from all encumbrances etc. should be taken.

Can the property be purchased through power of attorney?

Property in India can indeed be purchased through a power of attorney if an NRI cannot be physically present in India. There is a proper prescribed procedure to authorize someone through the POA. It is routed through the office of Indian Embassy in the country of residence of NRI. 

Read More: Opening an NRO Account – steps, details, requirements

Can a property be purchased jointly?

Yes. An NRI can buy a joint property with another NRI. But not with any person who is not authorized to invest in India.  

There are no specific guidelines issued under FEMA for purchase of property by NRIs jointly with resident Indian. It depends upon case to case. 

What are the taxation rules for NRIs buying property in India?

NRIs can earn income from investment in the property either in the form of rental income or capital gains. (Capital gain is income earned by sale of property in India). This income is taxable. 

Under DTAA (Double Taxation Avoidance Agreements), an NRI can claim the tax credit in his country of residence, for taxes paid in India.

Tax benefits on purchase of the property are the same for both NRIs and resident Indian. Deduction of Rs 1.00 lac u/s 80C of the Income Tax Act as available to a resident is also available to an NRI.

Read More: Sale deed: What you should know!

The income tax rate is 1% (TDS) of the value of the property if the value of the property bought is more than Rs 50 lacs. The rate is higher if the seller of the property is also NRI. 

If NRI avails home loan to buy a property, the interest paid on loan is deductible from the taxable income.

Last but not least: Buying a property in India by NRI does no longer remain a difficult task. It has become lucrative to invest in India these days. RBI and FEMA guidelines and policies are supportive. 

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Property rights of a son on mother’s self-earned property – Issues and the Law

Property rights of a son on mother’s self-earned property

There has been such a massive change in the social milieu in our country that now issues arise regarding a mother’s property too – reflective of the fact that women have shares in the family property now.

In further lines of succession of property owned by a woman, a son can claim a share in his mother’s self-earned property only if the mother wants. But if the mother dies intestate, the issue of claim arises.

Distribution of property among family members of the deceased when the person has died intestate has always been a challenging task.  The issue becomes more complicated when the property consists of both ancestral and self-earned property.

Also Read: The married daughters’ right in mother’s self-acquired property

Self-earned or Self-acquired property refers to the property:

  • made by a person by his resources or
  • which he has inherited under the law of succession or
  • acquired through Will or
  • which has come to him after partition.

How an individual deals with self-earned property:

  • The Law gives an individual the full right to deal with the self-earned property in any manner that he pleases; whether it is transferring the property by way of gift, sale or a Will.
  • A person can dispose of the self-earned property to the exclusion of his heirs. The entire property can be gifted to a third person/stranger.
  • No legal heir can claim any right over the said property till the time the owner of the property is alive.
  • The legal heirs can exert their right only if the owner dies intestate.

Personal and Statutory Laws governing property rights:

The right of the children in the property of their mother largely depends upon the personal law and statutory law governing such rights.

In India, the personal laws are related mostly to the religion of the person.  For Hindus, Muslims and persons of other faiths, there are different personal laws.

Under Hindu Law, a woman is the absolute owner of the property which she acquires by any means: gift, will, inheritance. This property becomes her self- acquired/self-earned property. She can choose to transfer the entire property to any person other than her husband and her children.

Also Read: Gift Deed- Implications, Interpretations and Information

Can a son claim on the self-earned property of his mother?

During the lifetime of the mother, a son cannot claim any share in her self-acquired property.  

However, if a Hindu female (mother) dies intestate, the property devolves among legal heirs as per the provisions of the Hindu Succession Act. The legal heirs are

  • Sons Daughters (if predeceased, their children) Husband

The children and husband of the deceased woman (mother) have equal inheritance rights.  Other legal heirs follow if the first order is missing, i.e. a woman dies leaving no children, no grandchildren and no husband, then the legal heirs are:-

  • Mother and father
  • Heirs of father
  • Heirs of mother

In the case of Hindus,

  • A son can, therefore, claim a right in the self-earned property of his mother if the mother has died intestate.
  • Both son and daughter have equal rights.
  • Even the share of ancestral property falling to the mother after the partition of the property becomes her absolute property and is treated as her self- acquired property.

For Muslim mothers,

  • It is the personal laws which govern the right of her son in the self-earned property.
  • Under Muslim law also, a woman becomes the absolute owner of the property which she has acquired by any means.
  • Generally, there is no distinction like the ancestral or self-acquired property under Muslim Law.
  • The children of a Muslim mother cannot claim any right during her lifetime.  Inheritance opens only on the death of the person.

Also Read: Can NRIs buy property jointly with resident Indian?

For persons of other faiths, the right of the children in the property of the mother is governed by the Indian Succession Act. The relatives of the woman and her children are given preference over her husband and his relatives.

The issue of a son’s claim would therefore largely depend on the personal laws governing that particular segment and the line of succession.

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How to file a partition suit for a property in India

how to file a partition suit for a property in india

Partition is a division of property among those who are entitled to the same. In case of property held jointly, if all the co-sharers decide mutually among themselves to divide the property and agree for specific share, there is partition by mutual consent. If there is a dispute, the parties file a suit for partition in a civil court.

Existence of a Right:

A person can claim a share if he has a right in the property. The right can be there:

  • As a legal heir
  • As a co-owner/co-sharer
  • Through any document conferring the share – Will, Gift Deed, Sale deed etc.

When the partition suit is filed, Court may fix an enquiry and appoint a Court Commissioner to ascertain the existence of the right of the party and its share in the suit property.

Read More: Division of property between brother and sister after father’s death

Process of filing a partition suit:

Partition suit is a civil suit, and the process of filing is the same as that of a civil lawsuit.

A. Drafting and filing of plaint – A plaint is nothing but a statement of facts of the case wherein the claimant explains and justifies his claim for the share in the property.

  • A plaint is drafted as per the formats applicable in a particular court. Generally, it is the same everywhere in India with a few differences in presentation.

B. Affixing the appropriate court fee – Requisite court fees must be deposited at the time of filing the plaint. It is essential to submit an accurate court fee. The court fee depends upon :

  • Nature of the case- If the parties are in joint possession of the suit property, the amount of the court fee is fixed. The court fee does not depend upon the market rate. If the party is not in  possession, the court fee is paid on his share as per the market rate.

The court fee structure varies from State to State.

Read More: Division of Property Among Daughters and Daughters-In-Law

C. Placing on record the relevant documents: The party in support of its claim submits the relevant documents. The documents can be-

  • Title deed – It is the primary document which confers the title to justify share in the joint property. It can be in original. If original not available, certified copy can be obtained.
  • Valuation of property- A certificate is issued by the Office of Sub Registrar confirming the value of the property as per the market rate.

Any other document can be filed, which establishes the right in the suit property or which fails the claim of the defendant.

The party filing the suit may or may not possess the original documents. Certified copy of the same can be obtained from the offices of concerned authorities.

Read More: Property rights of a wife after husband’s death

Who can file?

Any or all of the co-owners can file a partition suit. The co-owners can be legal heirs also if it is a family property. Anyone having a share in the property which is intended to be partitioned can file the suit.

Where to file?

A suit for partition is filed in a Civil Court having jurisdiction over the area where the property is located.  If there are several properties, the lawsuit can be filed in any one of the courts.

The partition suit results in a decree which ends the joint nature of the property. Court may order sale of the property and distribution of sale proceeds.