1) stamp duty would not be applicable to the 2 members automatically
2) Releasors will be the retiring members and releasee will be the HUF
Is stamp duty applicable after relinquishment of share in an HUF
Assuming there are totally 4 members in an HUF. If 2 members retire/relinquish their rights out of love & affection in favour of continuing HUF members: * Will stamp duty be applicable to the continuing 2 members (who's share from 25% each has now become 50% each) automatically. Although they're still very much part of the HUF & haven't got anything in their personal name.. * Its clear that the retiring members will be called the "Releasors" but who will be the "Releasee" (beneficiary) in such a relinquishment deed? Will we need to Individually name the continuing 2 members (of which 1 is a minor) OR can the HUF itself be called the releasee OR both methods are correct? Who will sign as "Releasee" in either case? Basic idea is to correctly draft the deed & also avoid unnecessary stamp duty
Asked 8 years ago in Property Law
Religion: Hindu
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4 Answers
The stamp duty is payable on the registered relinquishment deed.
In case of Release deed, you will be relinquishing your right over the property as now you are also the owner of that property. Relinquishment also amounts to transfer in terms of S. 2(47) and hence cap gain shall attract But if you make a gift deed then gift to relatives is exempt (S. 47) and hence no cap gain.
The release deed cannot be made on any individual name but it will be favoring in common to the other shareholders.
In release deed, the relinquisher alone will be signing the registered deed in favor of the other shareholders, the other shareholders in favor of who the relinquishment is made may or may not sign the acceptance, but they can accept it orally too.
Thank you for your answers. I'll share a few more details buy my concern is specifically in regards to the HUF retirement arrangement & the tax liability that may arise from retirement of few members. I forgot to mention that this HUF relinquishment deed will most probably be a registered document, filed along with 'consent terms' in the court, all being done for the purpose of an internal family settlement, with regards to the estate of 2 deceased family members (one of which includes my Grand dad) & my Grand dad's HUF. Certain family members are proposed to accept a settlement amount as per this consent terms document for all of the 3 above estate/properties & their subsequent release of right. However, in the actual HUF relinquishment deed they would release their share out of natural love & affection as they don't want anything in particular from the HUF. Would this arrangement be appropriate? If we need to show that they're receiving settlement amount solely from the deceased property alone, those changes can specifically be made in the consent terms. Reason to insert a mention of their 'HUF retirement' in the consent terms was to obtain a seal of approval on all documents, while seeking a decree from the court, in this suit. Coming specifically to the tax liability of the HUF, I'm slightly perplexed why Mr Kalaiselvan had mentioned capital gains tax here. The share of the retiring members is proposed to continue/remain in the HUF & is not being given/transfered to an specific individual. We were told the only liability we could face was 5% stamp duty, on the ready reckoner value of the asset being held by the HUF. However, since we're from Maharashtra, would this stamp duty also be applicable after Mr Eknath Khadse announced a relief in 2015, with regards to no stamp duty being applicable while transferring among 'Blood relatives'? More specifically, the people releasing their right from the HUF is my grandmother & bhua & we're trying to avoid any unnecessary tax on the HUF or their continuing members, be it stamp duty or capital gains tax. Also, as suggested by Mr Kalai, if a gift deed helps circumvent all tax liabilities smoothly, how exactly can that be done?
Asked 8 years ago
there would be no capital gains tax
2) the concessional stamp of Rs 200 is applicable only if residential or agricultural property is gifted to husband , wife , son , daughter , grand son , grand daughter , wife of pre deceased son
3) if executed by grand mother , BUa in favour of HUF it would not attarct concessional stamp duty of Rs 200 but attract stamp duty at 5per cent
The latest ruling on stamp duty reversed by the minister in the year 2015 has again been reversed and hiked from Rs. 200/- to 3% of the market value by the Maharashtra government
Stamp duty on conveyance deeds in gram panchayat areas goes up from 3% of land rate to 4%. Stamp duty rate in peri-urban areas which are governed by municipal councils, some of them in the Mumbai metropolitan region (MMR), has been increased from 4% to 5%. The rate for conveyance in municipal corporation areas, however, remains unchanged at 5%.
The decision, aimed at boosting revenue, will result in government charging 3% of ready reckoner rate as stamp duty if a flat is gifted to a blood relative or a spouse.