There are two main ways to pass on property to the next generation: donation by deed and will. Both are ways to legally transfer property. But their biggest difference is that a deed of gift transfers the property during one’s lifetime, whereas a will takes effect after death. Let’s understand…
1. Deed of donation: This is an ongoing process. Once the property is transferred, the owner loses his rights to it. Therefore, hand over the property only to a person you fully trust. Giving a large portion of assets to one person can also create conflicts among other heirs.
Signatures of two witnesses required
Preparation of the act: It includes details about the donor, recipient and ownership.Witness Requirement: The signatures of two witnesses are required.Stamp duty and registration: Stamp duty varies by state.Maharashtra: The stamp duty for blood relations is ₹200 plus 1 percent metropolitan tax.Uttar Pradesh: The stamp duty for blood relations can go up to Rs 5,000.
tax rules
Tax exemption for relatives: Property given to close relatives is exempt from tax.Tax for non-parents: Tax must be paid on assets worth more than ₹50,000.Capital gains tax: The beneficiary must pay capital gains tax when they sell the asset, which depends on the original purchase price of the asset.
2. Will: A will is a legal document that decides to whom and how your assets will pass after your death. Its biggest advantage is that you retain ownership of the property throughout your life. You can change your will at any time.
Will process
Prepare a will: This clearly states to whom and how your assets will be distributed.Witness Requirement: The signatures of two witnesses are required on the will.Registration (optional): This is not required, but it provides legal protection.
tax rules
No inheritance tax: In India, there is no inheritance tax on transfer of property through a will.Capital gains tax: The heir will pay capital gains tax when the property is sold.