Your nephew can execute relinquishment deed for his share in property
itt should be stamped and registered
your brother in law can execute gift deed for his share in property
How to safely transfer joint property
My sister and I own 2 joint properties(self paid by both). Both of us are ladies. My sister died intestate few months back . Now her legal heirs are her husband and 23 year old son . My sister s husband and son ( my nephew) want me to keep both the properties fully, giving up their right in the properties . I am a little confused as to how it can be done as I am not a legal heir of my sister's share , but just a co owner . Also I was reading up that nephew to aunt gift doesn't fall under the definition of a relative under income tax 56(2)and becomes taxable in my hands . I know brother in law can gift to sister in law .What would be the way to do this without any income tax complications? Will this be my nephew gifting me or he is only relinquishing it and there won't be any income tax complications?what is the way to do -Noc, relinquishment or gift deed? Will there be any capital gain tax, income tax (if nephew gives to aunt)? Will I have to go through my brother in law to do this ? What is the simplest and safest way to do this. Thanks dear
Asked 2 years ago in Taxation
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6 Answers
For gift of immoveable property there is no tax implications unless the gifted property is a commercial property generating regular revenue.
However this gift attracts full stamp duty and registration fees.
They can execute a registered relinquishment deed and give their share to you by transferring the same
Dear Client,
Your sister's husband and son can execute a relinquishment deed in your favor, relinquishing their rights in the properties. This process generally involves a legal document stating their intention to give up their share in the properties. Also gifts from a nephew to an aunt may attract income tax implications. Alongside the relinquishment or gift deed, obtaining a No Objection Certificate (NOC) from your sister's husband and son would be prudent. It signifies that they have no objections to the transfer of the properties. The process might involve preparing the necessary documents, obtaining signatures, and registering the deed with the relevant authorities. Your brother-in-law may need to be involved in the process, especially if he is relinquishing or gifting his share.
The property is owned jointly by both the sisters and it is their self acquired property and not inherited property.
In this situation even if the deceased was alive, she cannot relinquish her rights in the property if she wanted to transfer her share in the property.
Now upon her death, her share in the property shall automatically devolve on her own legal heirs.
Bow the legal heirs can transfer their in the property in favor of co-owner by executing a registered gift deed.
Since the share of property is being transferred by the donors by a gift deed, no consideration amount has been received by them for this act.
Hence they need not pay any tax for this transfer of property.
You being a donee, you don't have to pay any tax for accepting the gift of property.
You may have to pay long term capital gains tax at the time you may decide to sell this property.
your brother in law and nephew will have to transfer their 50% share [inherited from your late sister] by executing a registered gift deed in your favour
as per s.56(2)(x)(b)(A) of IT Act, 1961, 25% market value/stamp duty value of the property in respect of the share of your nephew being transferred in your favour, will be treated as your income from other sources and you will have to pay tax on it
if you want to avoid the above, then your nephew can transfer his share to his father thereby making his share 50%, and thereafter your brother in law can transfer that 50% to you by way of gift deed.
