Property is the most common gift that a generation in the family passes on to the other. If the time has arrived for you to plan the property transfer then you must be knowing that there are 2 options for proceeding, namely gift deed and will. But each of these methods has both advantages and disadvantages that you need to consider to resort to the procedure that suits you best.
Property Transfer through Gift Deed
Gifting your residential property to your loved one requires you to order for a gift deed for which, you have to pay Stamp Duty on the date of its execution.
You need to acquire a recipient of the gift or someone else on his /her behalf during your lifetime.
The Transfer of Property Act lays down that the gift deed must be registered under the concerned area’s registration office.
If the recipient of your gift isn’t a relative of yours according to the provisions laid down by Section 56(2) of the Act and the property value is greater than 50,000 rupees on the execution date of the gift deed, the recipient has to pay relevant tax on the gift. That means the property’s market value will get added to the total income of the year in which, the individual receives the gift from you.
Property Transfer through Will
In the case of executing a will, your loved one would attain the authority of ownership on the gifted property only after your death. The advantage of will execution is that costs relatively less than a gift deed.
Besides, the will registration is not obligatory but to get it registered would be a safety measure against litigation concerning property succession.
Unlike property transfer through gift deed, the will doesn’t demand the payment of Estate Duty from the receiver of the gift.
The recipient is free from the payment of income tax and the laws of Section 56(2).
The execution will ensure that the property is acquired only by the successor named in it. The assets including houses not included in the will would pass to the legal heirs under the law of succession.
Which One Would be the Best Option for You?
Transferring immovable property through a will is the suitable choice for you if you wish to exercise control on the gifted asset during your lifetime but at the same time ensure that it is obtained only by the individual or people you want to.
The will allows inheritance of property by your nominees and facilitates the property succession without any irregularity.
On the contrary, execution of a gift deed is apt for transferring property to a loved one who needs immediate assistance from you. Otherwise, a will is the safer option for avoiding any financial difficulty or homelessness at old age.
This mode of property transfer is useful when dealing with not the entire property but a portion of it for avoiding litigation. Gifting property through the deed while you are alive solely for saving on taxes is highly not recommended since you won’t retain any authority over your property.
Hope, the reading will help you make a sound decision in future. Do you own flats in South Kolkata that need to be sold or looking for one to purchase? Log onto transventor.com and find an immediate solution to your problem.