Property and land is an immovable asset that can be used over a long duration. Immovable assets can also be transferred to anyone you wish to give, it could be one of your family member, friends, or even charity, in line with the common rules of succession.
There are charges and legal formalities involved whenever there is a transfer of property. Thus, how can you transfer ownership? Well, there are two prime options- through a gift deed or Will.
Understand the notable features of both the ways of transfer of property.
You can gift your self-acquired assets to anyone, as long as you are eligible to enter into a legal contract as per the existing law of the country.
- The donee requires to accept your gift.
- A gift deed is not mandatory to be prepared, but it brings in transparency.
- In this, there are no taxes to be paid if the gift is made to relatives and friends. Nevertheless, stamp duty, as well as registration charges, will have to be paid to make the property transfer legal.
- However, In case of a gift made to non-relatives over Rs 50,000, the receiver will have to pay taxes on the received gift. (It is best to check individual state rules for more detailed clarity)
- A gift once made is irrevocable.
- Transferring property by the way of gift can be done during the lifetime of an individual.
Property transfer can be made through Will document too. However, it will take place directly, only after the lifetime of the individual writing the Will.
- Registration of the Will is not obligatory but may be done to avoid the litigations at a later date.
- The person who has been gifted the property through a Will is not bound to pay any taxes.
- After the death of a person, the property passes on to the successor even in the absence of a Will, as per the succession laws of the particular country.
- A Will can be replaced or revoked any time during the lifetime of the person drawing it up.
Which one of the two is better?
No doubt, both ways have their merits and demerits. Transfer of property through a gift deed is better when there is a need to transfer on an urgent basis, whereas if a person wants the property to move on to his or her successors only after his or her death, then writing a Will may be the best way out.
Moreover, if the transfer is meant for masses other than relatives, then making out a Will seems to be a better option from the financial viewpoint. While the time of transfer assets also would matter.