Dr. Deepak Jain Director, AAFM India3 days ago
- copy link
There are two main ways of passing on property to the next generation, gift deed and will. Both are means of legally transferring property. But their biggest difference is that a gift deed transfers the property during the lifetime, whereas a will takes effect after death. Let us understand…
1. Gift Deed: This is a permanent process. Once the asset is transferred, the owner loses rights over it. Therefore, hand over the property only to a person in whom you have full confidence. Giving a large portion of the property to one person can also create disputes among other heirs.
Signatures of two witnesses required
- Preparing the deed: It includes details of the donor, recipient and property.
- Requirement of witnesses: Signatures of two witnesses are required.
- Stamp Duty and Registration: Stamp duty varies according to states.
- Maharashtra: The stamp duty for blood relation is ₹200 plus 1 per cent metropolitan cess.
- Uttar Pradesh: Stamp duty for blood relation can be up to Rs 5,000.
tax rules
- Tax exemption for relatives: Property given to close relatives is tax free.
- Tax for non-relatives: Tax has to be paid on assets worth more than ₹50,000.
- Capital Gains Tax: The recipient has to pay capital gains tax when he sells the asset, which depends on the original purchase price of the asset.
2. Will: A will is a legal document that decides to whom and how your property will be given after death. Its biggest advantage is that you retain ownership of the property throughout your life. You can change your will at any time.
Will process
- Preparing a Will: In this it is made clear to whom and how your property will be distributed.
- Requirement of witnesses: Signatures of two witnesses are required on the will.
- Registration (optional): Not mandatory, but it provides legal protection.
tax rules
- No inheritance tax: In India, there is no inheritance tax on transfer of property through will.
- Capital Gains Tax: The heir will pay capital gains tax when he sells the property.
