Home / Money / Calculators /  Co-operative housing can’t object to transfer through gift

Can a member of a co-operative society effect a transfer of a flat by transferring or selling his shares without any other material consideration? Can a society raise any legal objection to such a transfer? Is it necessary to register the transfer deed with any other legal body? If so, what is the procedure? As there is no price or sale involved, will it attract stamp duty?

—M. Royson

We are assuming that the flat in question is situated in Mumbai and forms a part of a co-operative housing society governed by the provisions of the Maharashtra Co-operative Societies Act, 1960.

From a legal perspective, there is no difference in effecting a transfer of a flat in a co-operative housing society either by a mere transfer of shares issued by such a co-operative housing society by executing a transfer form or by executing a deed whereby both the shares and the right, title and interest in the flat are transferred. While the society cannot object to either of them, most people prefer the latter so as to document certain rights and other understanding between the transferor and the transferee.

From the stamp duty perspective, the Supreme Court has held that a transfer/sale of shares issued by a co-operative housing society would attract the same stamp duty as leviable on a conveyance. Therefore, the same amount of stamp duty would be payable on a transfer form whereby shares issued by a co-operative housing society are being transferred and on a deed of transfer/gift deed. Also, both instruments would have to be registered under the provisions of the Indian Registration Act, 1908, and applicable registration charges will apply.

As per the provisions of article 25 of schedule I of the Maharashtra Stamp Act, 1958, the stamp duty payable on a transfer form whereby shares issued by a co-operative housing society are being transferred or on a deed of transfer/sale deed, will be 5% of the market value.

As you have mentioned that the transfer is not being done for any material consideration, we are assuming that the flat in question is being gifted. However, as per the provisions of article 34 of schedule I of the Maharashtra Stamp Act, stamp duty is payable even on a gift deed. In the event the property is being gifted to a family member being the husband, wife, brother or sister of the donor or any lineal ascendant or descendant, the stamp duty payable will be 2% of the market value. If the property is being gifted to anyone else, stamp duty will be payable as per the provisions of article 25 of schedule I of the Maharashtra Stamp Act.

As per section 123 of the Transfer of Property Act, 1882, for the purposes of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor and must be attested by at least two witnesses.

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