VR Logo

Transfer of Property

Find out the legalities, the tax implication on the transfer of immovable property to your family members.

Does transfer of house property require compulsory registration of the documents? I have to give away my share in immovable property in favour of my brothers under a family settlement. What shall be my income tax liability?
Priyaranjan Das Gupt, Jamshedpur

Transfer of property under a gift or will do not amount to transfer under income tax for the purpose of levying tax. Supreme Court held in Ram Charan Dass v. Girija Nandini Devi, that any transaction consequent to a family settlement entered into by the concerned parties to put an end to family dispute amongst themselves does not amount to transfer for the purpose of capital gain.Since there is no transfer of property, no capital gain tax is to be paid under the Income-tax law.

However a contradiction arises on account of Transfer of Properties Act 1882 read with Registration Act 1908, wherein release of interest, in immovable property under a family arrangement, by the owner to another persons constitutes "transfer" and a written document evidencing the arrangement is to be registered with the authorities if the value of the transaction exceeds Rs. 100. The deed must be submitted for registration within four months of execution to avoid fine and inconvenience.