Transfer of Property

Let us get acquainted with the word 'transfer' in a legal term. According to the Transfer of Property Act, 1882, the Transfer signifies "an act in present or future, through which a living person conveys property, to one or more other living persons, or himself." This definition gives various essential establishing a transfer but does not point out how we can execute conveyance. So, here are the different ways of Transfer immovable and movable property by NRIs in India. Ways of Transfer of Property in India by NRIs Sale Let us start with the most commonly accepted way of Transfer, i.e., Sale. Understanding of meaning and concept Sale, in general, means the Transfer of title to a particular property for consideration. One can make a Sale in favour of movable or immovable property. The main essential requirements for executing a sale are two or more persons, consideration, subject matter. Though it is a popular transfer method, it is neither cost-efficient nor tax efficient. It is undertaken based on a large amount of consideration that is further subject to ad-valorem tax. Recommended reading: Potential legal pitfalls to avoid when buying and selling property Law application Sale in respect of immovable property is governed by the Transfer of Property Act, 1882, whereas in respect of movable property, it is governed by the Sales of Goods Act, 1930. The document by which Transfer is completed and its registration The Sale can only be completed with the execution of a document called a sale deed. The sale deed shall be reduced to writing and shall be signed by the buyer and seller in the presence of at least two witnesses. It is compulsory to register the sale deed with Sub-Registrar under the Indian Registration Act, 1908. Recommended reading: Transfer of property ownership in India Gift Understanding of meaning and concept The gift is the Transfer of existing property, whether movable or immovable, to any person voluntarily without consideration. One of the significant essential of the gift is the acceptance of the gift by the donee. Law application The gift of both movable and immovable property is governed under the provisions of the Transfer of Property Act, 1882. A document by which Transfer is completed and its registration Gift of immovable property should compulsorily be done by written Gift Deed, which is required to be registered as per Section 17(1)(a) of the Registration Act, 1908. In the case of gift of movable property, no such compulsory document or registration is required instead, and it is optional. Relinquishment of share in a property Understanding of meaning and concept Relinquishment is the Transfer of a share in the property by one co-owner to other co-owners. It can be with or without consideration. Law application Relinquishment of immovable and movable property should be in terms of the Transfer of Property Act, 1882 and the Indian Contract Act, 1872. The document by which Transfer is completed and its registration A relinquishment deed is compulsorily required to be registered under Section 17 of the Indian Registration Act, 1908. Succession Understanding of meaning and concept Succession is passing on property, title, debts, rights and liabilities of deceased to his legal heirs. Succession comes into effect when a person dies without leaving behind a 'Will'. Through the 2005 amendment to Hindu Succession Act, 1956, even daughters were included as legal heirs. Recommended reading: NRIs and Commercial Property Law application Succession is governed by personal laws such as the Hindu Succession Act, 1956, Muslim law of inheritance etc. In case the person is not a Hindu, Muslim, Buddhist, Sikh or Jain, the Indian Succession Act, 1925 govern him Will Understanding of meaning and concept Will is a document depicting the desire of a deceased person about the distribution of his property; the property can either be self-acquired or be inherited property. The maker may revoke Will at any time during his lifetime. The executor or legal heirs of the deceased can apply for probate to Court after the testator's death. Probate is the authorization of the Will by the Court indicating that it is the last Will of the person to be executed. Probate is always issued to an executor. Law application Will made by Hindu, Buddhist, Sikh or Jain is governed by the provisions of the Indian Succession Act, 1925. In contrast, Will made by Mohammedan is governed by Muslim Law. Recommended reading: Can NRIs buy property jointly with resident Indian? The document by which Transfer is completed and its registration Registration of Will is not compulsory; instead, it is optional. Mortgage/Pledge Understanding of meaning and concept A mortgage transfers an interest in a particular immovable property as security until payment of respective debt. Pledge is the same as the term 'mortgage', but the Pledge is used in reference to movable properties. Law application The mortgage is referred under the Transfer of Property Act provisions, 1882 and Pledge is governed by the Indian Contract Act, 1872. A document by which Transfer is completed and its registration In the case of a mortgage without the deposit of title deed, the document reduced to writing is only evidence as to mortgage. Such evidence needs to be registered under Section 17 of the Indian Registration Act, 1908. It requires to be registered as a non-testamentary instrument creating an interest in immovable property. Whereas, in the case of a mortgage with a deposit of title deed, the registration of the mortgage deed is not necessary. Lease Understanding of meaning and concept A lease is a contract in which possession or enjoyment of property is transferred for a certain period for paid or promised price. Law application The lease of immovable and movable property is also applicable as per The Transfer of Property Act,1882. A document by which Transfer is completed and its registration According to Section 17(1)(d) of the Registration Act, 1908 requires mandatory registration of a lease deed of immovable property let out from year to year; or for any term exceeding one year; or reserving a yearly rent. Recommended reading: How to cancel Illegal Registration of ancestral property Exchange Understanding of meaning and concept When two or more persons mutually agreed to exchange one particular property, movable or immovable, it is called the exchange for the ownership of another. Both the things exchanged can be money. Law application Exchange of both movable and immovable property should be as per the provisions of the Transfer of Property Act, 1882.

Transfer of Property

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