Hello Sir, My mother has possession of an urban agri land in Kancheepuram Tamilnadu. We are doing agriculture there for more than 20 years. The land was originally bought by my great grandparents. It then went to my grandfather. My grandfather later gave it as gift to my mother. In my understanding it lost its ancestral status because of the "gift" transfer from my grandfather to my mother. We now have a buyer ready to buy it. But they are asking to include my name in the upcoming sale deed/registration since they view this as ancestral - 4 generations (great grandparents - grandfather - mother - son ). Being over-cautious, they want me also to sign the document as a seller/coparcerner. I explained the situation as in above paragraph but they are very keen on this process. They are a real estate company and not new to buying such land. The questions are: 1. Can I sign as a seller/coparcerner along with my mother like they are asking me to? Is that even valid? 2. Buyer will give a cheque for 50% of sale price in my mothers name and 50% in mine. Will I be treated as a coparcerner by the AO or will they say LTCG exemptions don't apply to me and ask to pay full 20% LTCG tax? - I mean, LTCG exemptions only for my mothers portion and full 20% LTCG tax for my portion. 3. Or, Can we get full payment/100% cheque in mother's name but sign in the sale deed/registration like the buyer ask me to? I tried explaining to the buyers but they are adamant that they need my signature. Thanks
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Hello,
1. You are not entitled to any share in the property that has been transferred by a registered deed to your mother's name. The insistence on you to become a joint seller to this property which is absolutely belonging to your mother alone, is nothing but their ignorance of law.
You can become a witness to the sale deed, you need not be a joint seller without having any rights in the property.
2. Since you do not have any rights in the property, you cannot receive any sale consideration amount directly from the buyer.
The LTCG and other issues are nothing but legal complications.
When you do not own a property at all there is no meaning in selling the property, if you cannot sell the property that you do not own then there is no question of paying or claiming any exemption under LTCG.
3. The sale consideration amount has to be paid fully on your mother's name alone and no partial amount can be made to your name.
Please remember the legal fact that a property on a woman's name shall be considered as her own and absolute property,m there is no question of ancestral proeprty share out of the woman's share of even ancestral property inherited by her.
Hence it would be legally incorrect for you to sign the registered sale deed as a joint seller even on the insistence of the buyer, by not signing the registered sale deed as a joint seller you can avoid future legal complications that may arise in this regard.
Your mother is absolute owner of property
2) your consent is not necessary for sale of property
3) your signature is not required
4) you will not be treated as co par enter by AO
5) full payment should be in mother name
6) you can sign as witness
They can at the lost take your noc or Relinquishemnt deed if you have any lawful share otherwise no need
Hi
1) You are legally right in stating that the property is not ancestral (as the property is in your mother's name and she had obtained it by way of gift from her grand father).
2) In Hindu law, any property in the name of a woman is her absolute property and does not constitute ancestral property.
3) It appears that the buyers are wrongly presuming that the property is ancestral property.
4) However under Contracts Act, Evidence Act and Transfer property Act, there is a provision for "Consenting Witness" by which You as a legal heir of your mother can sign the sale deed as consenting witness.
5) Please be informed that Consenting witness is different from witness to the deed.
6) The status of consenting witness in a sale deed is similar to that of Seller and the name is included in the sale deed in addition to seller details as a paragraph and the Consenting witness is perpetually bound by the Sale deed once his signature is affixed in each and every page of sale deed.
7)But only thing is the consenting witness will not be paid any monies by the buyer and hence there will be no tax implications on Consenting Witness.
8) Hence full sale consideration will be paid to your mother and she alone will be liable to pay capital gains tax u/s 54 of Income Tax Act.
9) You can ask the buyer to include your name as consenting witness for which i am sure the buyer will have no legal objection.
Hope this information is useful.
1. The land has not attained ancestral character yet. Hence, no question of coparcenory which is a narrower concept in ancestral property.
2. Your mother does not require your consent to sell it. The buyers are misconceived if they deem it an ancestral property.
3. Nothing stops you from signing the sale deed as a confirming witness.
4. You cannot avail LTCG exemption.
5. Better look for another buyer.
1. It is no longer an ancestral property after the gift deed was registered by your Grandfather in favour of your mother for which you can not sign the sale deed. You can sign as witness in the sale deed and this arrangement should satisfy the buyer.
2. The sales proceed will not be taxed since there has bee non investment in buying the said property.
3. Yes, if the buyer insists, you can sign as seller but take the 100% payment in the name of your mother. You do not loose anything for signing as a co-seller as desired by the buyer. Save the evidence that the buyer had insisted for your signing as co-seller though you had informed them that you are not co-owner of the sad property.
