Guide to choose the way of transferring title of your property

transferring title of your property, nrihelpinfo

During the life of property and land, there comes a time when you have to transfer it on to someone else. There are different ways of transferring title of your property. A sale deed does not fit the idea when you want to transfer your property to your family members or relatives. In this case, gift deed or relinquishment deed is the best way.

Basically, for lawful transfer of an immovable asset such as property and land, you need to get the gift deed registered with proper authority. So, before you get any of these deeds drafted for transferring your property, you must know about the pros and cons of each of them.

1- Transferring title by the way of Sale Deed

This is the most necessary paperwork when transferring title of your property for monetary consideration to someone who might or might presently be related to you. When selling your house, you have to take the sale deed drafted and registered at the sub registrar’s office after which the sale becomes lawfully confirmed.

Pros– This is the easiest and best proof you can get about the sale of your property to someone else. It is a fool-proof document, and there are hardly any loopholes relating to forgery or fraud.

Cons- Sale of property results in short-term and long-term gains that provoke taxes. You must have a clear knowledge of tax implications through property lifecycle to be correctly sure of how and when you should sell your land and property.

2- Transferring title by the way of Gift Deed

When you are transferring title of your property and land without any consideration for money, you have to draft a gift deed. You are needed to draft the document on a stamp paper and also have it attested by two witnesses. Later, you have to get it registered with the sub-registrar of assurances is compulsory as per Section 17 of the Registration Act, 1908. Getting a gift deed made is essential in case of immovable properties like real estate, while it is not compulsory for the transfer of movable properties. Such transfer is irrevocable, so once you have transferred the property and land, it belongs to the beneficiary.

Pros- There are no any gains in this transfer, hence no tax implication. Though, you will have to pay the stamp duty on immovable property as per the prevailing rates in your state. Stamp duty may be less in a matter of transfer to relatives as compared to non-relatives.

Cons- Though it is an irrevocable deed, it can come with several challenges. Cases of coercion and fraud are the most common grounds for tricking someone into a property transfer via a gift deed. So, the deed can be challenged in court so while drafting or even accepting a gift deed, consult your property lawyer.

3- Relinquishment Deed

In case of co-owning a property, when you transfer your rights to the other co-owner, you have to use this instrument. It must to be signed by both parties and registered. This deed is also irrevocable whether with or without monetary consideration. The stamp duty will also be the same as gift deed, but it will only incur on your share of the property and not on its total value.

Pros- With a relinquishment deed, you can seamlessly transfer your shares in a jointly-held property. Unlike the gift deed, it can be drafted into a monetary consideration.

Cons- Like a sale deed, this instrument also leads to tax implications as a transfer, as per the tax laws, means relinquishment, not the gift. Thus, this results in capital gains which are taxable.

We advise seeking legal advice from a top property lawyer when you want to take the decision on transferring title of your property in India.

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Guide to choose the way of transferring title of your property

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