• Gifting of property

Me and my brother are directors in a pvt ltd co. The company is not doing business for the last 10 years. We would like to transfer the land in the company's name into our individual names by a gift deed . Is this possible in Karnataka? If possible do we have to pay stamp duty on registration of gift deed? What would be the stamp duty on gift deed if applicable in Karnataka?
Thanks
Asked 11 months ago in Property Law
Religion: Hindu

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9 Answers

Company cannot execute gift deed in favour of directors 

 

company can sell the land by registered sale deed 

Ajay Sethi
Advocate, Mumbai
84070 Answers
5480 Consultations

5.0 on 5.0

The company must maintain a register where all necessary particulars of such transactions shall be kept and to be signed by all directors. 

Gift of the property shall be charged at the same rate of stamp duty as of sale / transfer taking the market value as consideration of such transactions. 

Kallol Majumdar
Advocate, Kolkata
2800 Answers
7 Consultations

5.0 on 5.0

Hi, you can execute the Gift Deed. However, you need to pay the stamp duty on the market value  of the property.

Pradeep Bharathipura
Advocate, Bangalore
5135 Answers
282 Consultations

4.5 on 5.0

Yes if it's a gift deed execution you need to pay the stamp duty and registration. The registration amount is fixed apprx 30000/- but stamp duty varies as per market or ready reckoner value of property fixed by govt

Prashant Nayak
Advocate, Mumbai
24239 Answers
51 Consultations

4.4 on 5.0

Recently the Mumbai Bench of Income tax appellate Tribunal in a case of a private limited company held that the companies are competent to receive and make gifts and the natural love and affection is not a requirement. 

TPA, “Gift” defined. “Gift” is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee but without any consideration.

Further, the term living person includes a company or an association or a body of individuals whether incorporated or not.

(1) If the property gifted is situated within the limits of City Corporation area or in the Municipal Area in the State of Karnataka, the Stamp duty payable on Rs.1,00,000=00 value of the property is as follows:-

1 8% Stamp duty on Rs.1,00,000=00. Rs.8,000=00

2 5% Additional Stamp duty on Rs.8,000=00. Rs. 400=00

3 2% Surcharge duty on Rs.8,000=00 Rs. 160=00

Total Stamp duty payable Rs.8,560=00

4.  Registration fee @ 1% payable on Rs.1,00,000=00. Rs. 1,000=00

 (2) 

If the property gifted is situated within the Taluk Panchayath Area, the Stamp duty payable on Rs.1,00,000=00 value of the property is as follows:-

1. 10% Stamp duty on Rs.1,00,000=00.

Rs.10,000=00

2 5% Additional Stamp duty on Rs.10,000=00. Rs. 500=00

3 3% Additional Stamp duty on Rs.1,00,000=00. Rs. 3,000=00

Total Stamp duty payable Rs.13,500=00

4.  Registration fee @ 1% payable on Rs.1,00,000=00. Rs. 1,000=00

 

T Kalaiselvan
Advocate, Vellore
74174 Answers
1203 Consultations

5.0 on 5.0

First need to check whether company account is active and valid as per the registration act of the company act. Then later on you can apply for transfer land on your name as gift deed. Gift deed are approximately 5% stamp duty and 1% registration charges  as per state.

Ganesh Kadam
Advocate, Pune
12193 Answers
151 Consultations

4.9 on 5.0

1. Are there other share holders/directors of the said Company?

 

2. If no then wind up the Company and distribute the assets in both of your name including the land.

 

3. Thereafter you can sell of the land either in your name or by the Company (if it is not wound up) and in that process you will save stamp duty and registration fee for the transfer to you.

Krishna Kishore Ganguly
Advocate, Kolkata
26030 Answers
726 Consultations

5.0 on 5.0

Dear Sir,

You have to first close the company and stamp duty for gift deed is only Rs. 5,000/- and other questions may be answered by chartered accountant.

Kishan Dutt Kalaskar
Advocate, Bangalore
5948 Answers
317 Consultations

4.8 on 5.0

From examining all the facts of your query I want to say that-
These cases are very common in various Courts of India and Supreme Court of India. You can transfer the said land which is in company's name to your name. There are some Supreme Court judgements on this aspect.In case of gifting of immovable property (i.e., land or building), the recipient would be required to pay income tax if the stamp duty value of the property exceeds Rs 50,000 and such property is received without adequate consideration.

Any inadequate consideration received wherein the difference between the consideration and stamp duty value exceeds higher of Rs 50,000 and 5 percent of consideration, such difference shall be taxed in the hands of the recipient.

Chapter VII of Transfer Of Property Act, 1882, concerns the various formalities surrounding the creation of a Gift Deed.

As defined in the Act, Gift, “is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another called the donee, and accepted by or on behalf of the donee.”

Please understand that the Stamp Duty that is levied on the Gift Deed is calculated based on the percentages stipulated by The Karnataka Stamp Act, 1957. Furthermore, the registration charges of a Gift Deed can be referred to from the Section 17 of The Registration Act, 1908. A recent insertion in Article 28 of The Karnataka Stamp Act has now brought concessions to the amount of Stamp Duty to be paid when gifting a property to someone who is part of one’s ‘family’. Earlier the concept of family was limited to husband, wife, son, daughter, daughter-in-law, brothers, sisters and grandchildren. Gift Deed transaction among them would only amount to Rs. 1000 as Stamp Duty, irrespective of the value of the property. With the new amendment, father and mother were brought into the concept of ‘family’ and therefore, even parents getting property through Gift Deeds will also be charged Stamp Duty. Detailed discussion is required with complete documents.

Gopal Verma,
Advocate on Record & Amicus Curiae,
Supreme Court of India

Shri Gopal Verma
Advocate, New Delhi
308 Answers
5 Consultations

4.0 on 5.0

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