• Regarding Joint ownership and Tax

I own a property in Chennai from which I get Rent. The property has been bought on loan from a private bank. My questions are as follows

1) Can I make my wife to co-own the property given that it is still under loan? 

2) If yes, 
a) what is the least expensive method?
b) What are the bank related procedures?
c) Can you please detail out the stamp fees, Registration fee etc based on the current prevailing rates in Tamil Nadu (in relation to your response to question 2a above. Also please tell me on what amount is this applicable (i.e for example if I need to pay a stamp duty of 1% to register as gift, should it be on the whole amount for which I bought the flat (UDS + Construction) or only on the UDS or what is the actual amount against which I need to pay the stamp duty or what ever?

3) If the above are possible, then can she be the person enjoying the rental income fully or should it be partial only?
4) If it is partial, on what basis the ratio is determined? Is it based on the proportion that I gift to her?
(i.e If I give 50% as Gift, then should be enjoy only 50% of the rental income or can she enjoy that in full or are they not related)
5) Can I still be getting the benefits of tax for the full amount (Interest + Principal) or is that also going to be partial based on the ratio of the gift once the deed is executed.
Asked 7 years ago in Property Law
Religion: Hindu

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4 Answers

you can execute gift deed in favour of wife for 50 per cent share in property

2) gift deed should be duly stamped and registered

3) you need to obtain bank prior approval before executing gift deed

4) stamp duty rates only local lawyer can guide you as it varies from state to state

5) rental income to be enjoyed by wife would be in proportion to her share in property

6) wife cannot enjoy full rental income as she is not absolute owner of the property .

7) rental income is divided in the proportion of ownership in the property even if EMI is paid by the Husband

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

as per information available online stamp duty for gift deed in tamil nadu is 1% of Guideline Value subject to a maximum of Rs.25000/- (favouring family members)

2) registration charges are 1% of Guideline Value subject to a maximum of Rs.4000/- (favouring family members)

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1) Can I make my wife to co-own the property given that it is still under loan?

She cannot become a co-owner of the property without having a share in it.

For this you have to give her gift or sell a portion of the property to her by a registered deed.

This cannot be possible during the subsistence of loan. The bankers will not permit a portion of property to be alienated to third person during the subsistence of loan on the property.

2) If yes,

a) what is the least expensive method?

b) What are the bank related procedures?

c) Can you please detail out the stamp fees, Registration fee etc based on the current prevailing rates in Tamil Nadu (in relation to your response to question 2a above. Also please tell me on what amount is this applicable (i.e for example if I need to pay a stamp duty of 1% to register as gift, should it be on the whole amount for which I bought the flat (UDS + Construction) or only on the UDS or what is the actual amount against which I need to pay the stamp duty or what ever?

There is no yes to your first question itself hence second question has no validity.

3) If the above are possible, then can she be the person enjoying the rental income fully or should it be partial only?

The above is not possible during the subsistence of bank mortgage loan, first clear them and discharge the loan fully after which you can initiate the proposed action accordingly.

4) If it is partial, on what basis the ratio is determined? Is it based on the proportion that I gift to her?

(i.e If I give 50% as Gift, then should be enjoy only 50% of the rental income or can she enjoy that in full or are they not related):

As far as the rent is concerned, the owner of the property can get them, and if there are two owners and there is no understanding between them then they can claim rental income proportionately in accordance to their share in the property.

5) Can I still be getting the benefits of tax for the full amount (Interest + Principal) or is that also going to be partial based on the ratio of the gift once the deed is executed.

The income tax shall be computed on the total income of yours from all the sources.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

The only way you can make her a co-owner of the property is by releasing or gifting your 50% share in her favour. However, as the property has been mortgaged to the bank you cannot do so without the consent of the bank. During the pendency of the mortgage the bank will not give you the permission to make her a co-owner.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

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