My dad is Karta of HUF house property. Coparceners of HUF are dad, myself and my sister. Myself and sister want to relenquish our share to my dad in his personal capacity. For the same we will be signing partition deed which will be registered. After the partition Mr Dad will become the absolute owner of the property in his personal capacity. 1. Will myself or sister need to pay capital gain as we are relinquishing our share? 2. For registering the partition deed, what is the stamp duty that has to be paid. I was told it will be 3% of property value. Is this correct? 3. How is the property value determined?
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The Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that the income from the relinquishment of right over a property cannot be treated as “capital gain” for the purpose of levying an income tax.
2)Where any property is partitioned, the largest share which is remaining after the partition is Exempted from Stamp Duty. Stamp Duty shall be paid on the remaining portiions of the property at the Rate of Rs. 10/- for every Rs. 500/- worth (Market Value) of Property.
No partition deed shall be required. Relinquishing deed to be done.
No capital gain tax on such transaction.
Stamp duty would be minimal around 3% . It varies state to state. Confirm it from any registry office in your area.
1. Since you have not been benefited by relinquishing your rights in the property there is no question of any long term or short term capital gains by this transfer, hence you need not pay any tax in this regard.
2. As of now, no stamp duty is payable for the registering the partition deed among the blood relations.
3. you can visit the ready reckoner or visit the local sub registrar office for knowing this process.
1. No
2. Just like sale deed.
3. Ready reckoner value
1. if you are relinquishing your share then a partition deed is not needed
2. you and your sister will have to make a release deed in favour of your father
3. so your father will become 100% owner of the property by virtue of the release deed
4. if any consideration is passed on to you for the release then you will have to pay capital gains tax on it
5. stamp duty on the release deed will be the same as applicable for a conveyance or sale deed. however the duty will be calculated on 2/3rd undivided share of the property as per its market value.
6. the market value is determined as per the stamp duty ready reckoner. you have not mentioned the nature of the property, whether its a land or a flat or an agri land
