Sir / Madam : I own an owner of a property through a POA ( absolute) - since the owner cant visit India. The POA is registered in courts of overseas and also in courts in Tamil Nadu ( where the land is located). Being a POA holder can I gift deed the property to my sibling in order to avoid the exchange of money and register the property in the name of siblings by paying sale tax ? The intent is to relieve ourselves of the POA arrangement and obtain absolute ownership. Will it attract any income tax for my sibling?
- Yes, a registered POA holder can transfer a property on behalf of the owner , by way of Gift Deed.
- As per law, Any transfer of property under a Gift is not considered as a taxable transfer, and the receiver is also not under obligation to pay tax for getting the same.
POA sale is not valid India. Since it doesn't transfer title you , any transfer made by you shall also be invalid in law.
Get the property transfered in your name first by sale deed. Then gift it to your siblings.
You can gift the property to yourself.
No sale tax on sale deed. And gift dose not attract any tax, and you are gifting through PoA so LTCG tax will also not levy.
Property tax in the hand of sibling.
On basis of registered POA executed in your favour you can execute gift deed
2) gift deed should be duly stamped and registered
You can gift it only through ba registered gift deed. Gift tax is not applicable to siblings but if there is any income from the same then it will be taxable
Being a POA holder can I gift deed the property to my sibling in order to avoid the exchange of money and register the property in the name of siblings by paying sale tax
? Yes.
Will it attract any income tax for my sibling?
If he is filing returns regularly and Source of income exists then it will not attract tax.
Regards
G.Rajaganapathy
High Court of Madras
See for gifting you need specific power of attorney for same purpose. By absolute poa giving all rights you cannot register gift. You can register a sale deed in name of sale deed vide same.
I am grateful for the such prompt responses. But I am getting mixed and inconsistent responses. My intent is move away from the POA-ownership to an unencumbered ownership. At the same time not incur income tax liability to the receiver (sibling). Is there a specific POA to facilitate the gift of a land title ?
Specific POA has to be executed by your husband for execution of gift deed in your favour
Presently ownership not transfer in your name so owner is liable for any tax.
Property tax is payable in every case. You can gift him and you pay for it.
If you are authorised by the POA deed to transfer the property to anyone by executing a registered gift deed, in its recital, then you can proceed with the said transfer to your sibling.
However please be aware that until the POA is coupled with consideration, it is revocable anytime and also if there is no mention about gift deed transaction i the POA deed, then you may not be able to transfer the same by this provision.
Until there is a recital about transferring the property by a gift deed, you may not be able to execute the said transaction.
Hence you may transfer the property to your sibling by executing a registered sale deed which no doubt will not attract any income tax on the buyer, but the seller, being a NRI will suffer TDS at the hands of the buyer.
See gifts are generally not registered no general power of attorney for same the sub registrar ask for a power of attorney where it is specifically for gift and to person gift is to be made.
Supreme Court has barred the transfer of immovable property only on poa without sale deed to curb evasion of taxes and multiple false transactions. Now sale deed is mandatory
1. When was the property sold through GPA to you? Sale through GPA after the judgment of Supreme Court in Suraj Lamps case is illegal.
2. If your title is clear then you are free to gift your property to anyone you desire. However, if your title itself is defective then by executing a gift deed the title of donee will not become perfect. It is trite law that nobody can pass a title better than his own title.
Transfer of property by POA is illegal in India. No transfer can be made out by POA .I repeat it.
You must execute sale deed first then gift deed. Signing the deed can be done by the person holding POA on behalf of the title owner.
To be more specific you do not hold any valid ownership in absence of any sale deed and therefore you can not make any gift on the strength of POA in your favour. It would be void in law.
yes, you can execute gift, it should be duly stamped and registered.
Yes you can gift the property as POA holder to to your sibling.
But it will not attract income tax for your sibling because he is not paying consideration for property.
