My mother wants to make a gift deed or a will of the property in my favour. My mother is 91 years of age and cannot walk. Which option is better? I am staying in Mumbai. Do I need to take NOC of Society? Does the gift deed need to be registered?
Will vs Gift deed: The choice of any one alternative has different implications. Under the gift deed, the transfer of property takes effect immediately upon execution, subject to registration.
This ensures that the donor’s intentions are implemented during his lifetime but deprives the donor of its ownership immediately and irreversibly. Please note that the gift deed of a property needs to be adequately stamped as per the state’s stamp law and must be registered under the provisions of the Transfer of Property Act of 1882.
In Maharashtra, the stamp duty for a gift deed of residential property or agricultural land from a father to a son is ₹200, plus 1% Metro Cess for municipal corporation areas and 1% Local Body Tax (LBT) for rural areas. This applies to residential or agricultural properties gifted without payment to family members, including spouses, children, grandchildren, and the wife of a son after his death. This rule has been in place since 2015.
Making a will is cheaper than making a gift deed, as no stamp duty is required to be paid on the assets bequeathed under the will. A will is not required to be registered, but it is advisable to get the same registered to avoid any dispute about its validity.
Making a gift deed ensures that there are no disputes that may arise regarding the validity of a Will. If a Will is made, it needs to be probated for property situated in Mumbai.
In my opinion, no such NOC is required, but there is harm in obtaining one from society.
Balwant Jain is a tax and investment expert and can be reached at [email protected] and on @jainbalwant on Twitter.
You are on Mint! India’s #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!
Download The Mint News App to get Daily Market Updates.
Published: 30 May 2024, 09:10 AM IST
