In case a person dies without leaving a valid Will, all his assets pass on to his legal heirs, immediately on the date of the death, as per the succession laws applicable to him
I have inherited a residential house from my paternal uncle in January 2021 through a registered will. The property comes under a Gram Panchayat. I have not got my name registered in the records of the Gram Panchayat for this property. Now I am planning to sell the house and buy another residential house in the city where I presently reside. Is it necessary for me to get the ownership transferred in my name in order to claim LTCG benefits? -D Joglekar
There is different point of times when a property passes on the death of a person depending on whether the deceased has made a Will or has died intestate without leaving any Will in respect of the asset concerned. In case a person dies without leaving a valid Will, all his assets pass on to his legal heirs, immediately on the date of the death, as per the succession laws applicable to him. However, in case the deceased had made a valid Will, the executors are required to administer the assets as per the Will so the assets do not vest with the persons named in the Will till the executors take necessary steps. This implies that the executors have to ensure that the property gets transferred in the name of the legatee as per the wishes of the testator. Till the property so gets transferred, the income accrues to the estate of the deceased and the executors have to file income tax return representing the estate of the deceased. So in my opinion, you need to get the property transferred in your name to complete the instructions contained in the Will as regards this property.
It is advisable to transfer the property in your name also to avoid any litigation in future as the Will can be challenged by other legal heirs any time in future so in order to avoid any complications and to ensure better title for the buyer in the form of proper chain of documents, please get the property transferred in your name. However, I do not see any problem for you in claiming the long term capital gains exemption for this transaction as the tax department is not concerned about whether the property was transferred in your name or not.
Balwant Jain is a tax and investment expert. He can be reached at firstname.lastname@example.org