Property transfer in India can occur in a variety of ways such as gifts, mortgages, or sales. The options may vary depending on the circumstances. In India, when you claim property through gift, inheritance, purchase, relinquishment or something else, you need to ensure that all the revenue records and mutations are prepared in your favour as early as possible.
An overseas citizen will have no trusted representative for property transfer in India. Many factors may lead to illegal land transfer and complications by third parties. Therefore, to avoid these frauds and complications, you must efficiently transfer the property at the earliest in your name according to the legal procedures.
Modes of property transfer in India
There are primarily two types of property transfers in India. It depends on the situation and what kind of transfer you would choose to have.
- Voluntary transfer
- Involuntary transfer
A voluntary transfer is when the owner willingly transfers his properties. The transfer can be done in various ways like a gift, will, sale, mortgage, exchange, or lease.
Involuntary alienation or involuntary transfer refers to a situation where the property owner has not explicitly consented to their property transfer. However, they are bound by legal obligations.
Five ways to transfer property in India
Here we will discuss the five most common ways to transfer property in India in complete compliance with the law.
1. Sale deed
The most famous property transfer method in India is through Sale deeds. A simple example is when you have a property in possession and wish to sell it for a sale value. This is called a Sale deed. Legally, the enrollment of a sale deed or transfer deed is necessary. After the sale deed is enlisted in the Sub-Registrar office, the new owner gets all the ownership rights.
2. Gift deed property transfer
Gifts can be in the form of houses, shares, money, jewellery, etc. It is something that is received without any second thought, or you may say an asset claimed without giving anything in return. It can be in the form of cash, movable property or immovable property.
A gift deed is used for gifting properties to any of your family members or friends. If it is an immovable property, you must register the Gift Deed under Section 17 of the Registration Act, 1908.
Please remember that this type of transfer is irreversible. If you gift any asset like land or house, it will henceforth belong to the respective recipient or beneficiary. You will not be able to ask for any monetary compensation or switch the transfer. It is quite a cost-effective method of transferring ownership.
3. Release deed or relinquishment deed
There may be multiple owners of a single asset. When one co-owner is required to transfer the property’s rights to another, execution of the Release deed or relinquishment deed is necessary. Property transfer through Release deed can take place with or without consideration, i.e. involving no money exchange.
4. An inheritance or Will deed
Will deed property transfer in India occurs when the owner dies, and their successor such as their children, wife, or other individuals are legally entitled to it and will receive the Khata or Patta transferred to the next generation.
A person can gain land through a Will deed or inheritance. When a property owner dies, all his/her properties are transferred to the successor as per the Law of Succession. The testator can make changes in the inheritance or Will deed during their lifetime. Therefore, the Will beneficiaries will inherit the property’s ownership rights after the previous owner dies.
After their death, the Will Deed or Inheritance will automatically pass to their successor. He or she does not need to enroll the property in their name. However, the individual will need to apply to the concerned local civil authorities with a copy of the will. The death certificate and the Succession certificate must be submitted to get the rightful transfer done in the individual’s name.
5. Settlement deed or partition deed
A partition deed is one that the land co-owners execute when a local revenue authority or court order has to be carried out.
However, in a settlement deed, a third person is the property owner, and it is settled for persons with no past interest related to the property. The share of the heir happens according to the settlor’s wish.
The settlement deed is a lot different from Will. It is a non-testamentary report that will become operative immediately. On the other hand, Will is a testamentary file which can become active only after the owner expires. The testator can cancel or modify the Will, but a Settlement deed is irreversible.
There are numerous methods of property transfer in India, out of which the Sale Deed and Transfer deed are the most common ones. We understand that the entire experience of decision-making can be quite hectic and mentally draining. However, make sure to look into everything to make an informed decision. Legal counsel is something that we highly recommend in such cases.