A gift deed allows one to gift assets or transfer ownership without any exchange of money
I am 67 years old, and have a son, a daughter-in-law and a grandson. I wish to transfer what I own to my son during my life time. For bank accounts and fixed deposits (FDs), he is either a joint holder or the sole nominee. Among gift deed, relinquishment deed, deed of conveyance, and making a registered Will, which is the least cumbersome and costly? Also, will making a registered Will necessitate its probate in court? My son will be the sole beneficiary and executor of my Will, if made. Will he still have to secure a probate (I am told it takes 8-10 months to obtain one)? I have only one house; and my wife is the joint holder. I was told that as my son is the only legal heir, simply submitting an affidavit before a first class magistrate will enable him to acquire the property. And that the Hindu Succession Act, 1956, allows this (if no Will is made). Would such an affidavit help him acquire the property?
We are assuming that you are governed by Hindu laws and the said property is a self-acquired one of you and your wife jointly.
To transfer the house solely to your son during your lifetime, the following methods are available:
Gift deed: You along with your wife may execute a gift deed in favour of your son thereby gifting the said property to him. A gift deed allows one to gift assets or transfer ownership without any exchange of money. The gift of immovable property must be in accordance with section 122 of the Transfer of Property Act, 1882 (TOPA). Hence, you along with your wife must transfer the property voluntarily, without consideration, and it must be accepted by your son during your and your wife’s lifetime while you both are still capable of giving. Further, the transfer must be effected by a registered and stamped instrument signed by or on behalf of you and your wife and must be attested by at least two witnesses. The amount of stamp duty and registration charges payable differs across states. In some, like Maharashtra, there is a remission in stamp duty on a gift deed if the gift is between certain stipulated family members or relations.
Relinquishment deed: A person uses this instrument to transfer his rights in a particular property to another joint owner(s)or co-owner(s). Such a transfer is irrevocable even if it’s without any exchange of money or it is for monetary consideration. Since your wife is the co-owner, this method may not be advisable to transfer the property to your son.
Deed of conveyance: Your son can buy the property from you and your wife by executing a deed of transfer and on payment of consideration for the same. No sale can take place or no deed of transfer can be executed without payment of consideration by your son to you and your wife. Stamp duty and registration charges will be payable on the deed of transfer in accordance with the provisions of the stamp Act in the state where the property is.
Making a registered Will: Considering your desire to transfer the said property in your lifetime, it is not appropriate to make a registered Will to transfer the said property since it will only come into effect after your death. Further, you can make a Will of only your portion of the said property and your wife will have to make a separate Will for her portion of property. Also, obtaining probate might be cumbersome and time consuming for your son.
Intestate succession: This mode is not suggested since the succession of your self-acquired property is as per the Hindu Succession Act, 1956. Accordingly, all class I heirs have an equal right to the intestate’s self-acquired property. Therefore, your son and wife and your mother, if she survives you, (being class I heirs) will inherit your portion of the said property jointly and would possess equal rights over it, which is against your desire to make your son the ultimate beneficiary of the said property.
Please note that it is mandatory to register the above mentioned deeds of transfer, i.e. a gift deed, release deed or transfer deed with the sub-registrar of assurances within whose sub-district the property is situated, as per the Registration Act, 1908 and within the time periods stipulated therein, otherwise the transfer will be held invalid.
Therefore, considering the facts mentioned and your desire to transfer the property to your son during your life time, executing a gift deed by you and your wife in favour of your son would be preferred. However the stamp duty shall be as per the relevant state Act and registration fees shall also have to be paid as per the relevant table of fees prepared by that state.