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Like Alia Bhatt and Kangana Ranaut, you too can gift your property to your siblings
One should also consider the cost-saving benefits of stamp duty exemptions available across states for property transfers or gifts between siblings, say experts
Bollywood star Alia Bhatt had transferred two flats in Juhu to her sister Shaheen through a gift deed last year. A few years back, Bollywood actor-turned politician, Kangana Ranaut, had gifted four under-construction luxury flats to her siblings and cousins in Chandigarh. Like them, you too can gift your property to your siblings.
Alia Bhatt had transferred two flats on the second floor of Gigi Apartments in Juhu to her 35-year-old sister Shaheen through a gift deed last April.
The two flats’ combined built-up area is 2,086 sq ft, and it came with one car parking. A stamp duty of ₹30.75 lakh was paid for the registration of the gift deed, showed documents accessed and shared by Zapkey.com.
In 2021, Bollywood actor Kangana Ranaut, who has starred in films such as Queen, Tanu Weds Manu: Returns and Manikarnika: The Queen of Jhansi among others, had gifted four under-construction luxury flats to her siblings and cousins in Chandigarh.
In a tweet posted then, she had said: “I want to encourage people to share their wealth with their family … remember happiness multiplies when it’s shared, they are beautiful luxury apartments under construction will be ready in 2023 but I am very fortunate that I could do this for my family.”
Media reports had pegged the cost of the four under-construction apartments at ₹4 crore. She had gifted these flats to her sister Rangoli Chandel, brother Aksht and two other cousins in Chandigarh.
Like Alia Bhatt and Kangana Ranaut, you too can gift your property to your siblings
Gifting a property to your brother or sister is a thoughtful idea of providing them financial security. One should also consider the cost-saving benefits of stamp duty exemptions available in various states across India for property transfers or gifts between siblings without the exchange of consideration.
“These exemptions not only incentivize inter-se gifts between siblings but also offer significant savings, making the process more financially advantageous,” said Jayshree Navin Chandra, Senior Partner, ZEUS Law Associates.
As per a Uttar Pradesh government notification dated August 3, 2023, there has been a remission in stamp duty charges for property transfers via gift deeds. This remission applies to gift of immovable property to immediate family members including siblings. It provides an opportunity for individuals to facilitate property gifting at a reduced / negligible stamp duty burden. Other states implementing such remission include Maharashtra, Haryana and Uttarakhand, she explains.
Having said that, while making such a transfer by way of gift, the most important thing to be kept in mind is that it has to be effected by way of an written instrument (gift deed) that has to be attested by at least two witnesses, said Mona Dewan, Managing Associate, ZEUS Law Associates.
The gift deed needs to be registered
The gift deed needs to be registered at the office of concerned sub-registrar and applicable registration charges and stamp duty will have to be paid prior to registration.
According to legal experts, one reason why siblings may decide to gift a property is to do with the fact that by handing over their property to the intended beneficiary during their lifetime they give finality to the estate plan regarding their assets. By doing so they make sure that legal hassles are avoided in future.
Stamp duty exemptions by states
Several states have notified special stamp exemptions or rebates on the instrument of gift where such gift is from immediate blood relative or spouse.
States like Maharashtra and Uttar Pradesh have prescribed nominal stamp duty charges and in Haryana stamp duty is completely exempted for transfer of property by way of gift to spouse or specific set of immediate blood relatives. This cost saving has led family members to consider gifting their flats, house, plots, commercial units or other immovable assets to their spouse or children, they say.
A gift is a transfer of property, either movable or immovable, which is made voluntarily by one person in favour of another living person, out of natural love and affection, without any monetary consideration and is governed by the provisions of the Transfer of Property Act, 1882, said Soumya Banerjee, Partner, AQUILAW.
“Thus, a gift by an individual to his/ her siblings is permitted under the law. However, while a movable property may be gifted by way of a registered instrument or through delivery of such property, a gift of immovable property is mandatorily required to be effected through a registered instrument of gift, duly attested by at least two witnesses, which will attract applicable stamp duty and registration fee,” said Banerjee.
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As per the Indian Stamp Act, 1899, the percentage of stamp duty for an instrument of gift is the same as applicable to a deed of conveyance, on the prevailing market value of the immovable property being gifted.
However, various states have brought amendments by which a reduced rate of stamp duty has been prescribed for gifts made to family members, including siblings. For example, in the State of West Bengal, the stamp duty payable in case of gifts made to family members is 0.5% of the market value of the immovable property, which has been proposed to be further reduced to a maximum amount of ₹1,000 only, he explains.
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According to Prashanth Shivadass, Partner, Shivadass & Shivadass Law Chambers, individuals can certainly gift properties to his/her siblings, by way of a gift deed, subject to registration of the deed. There is no waiver when it comes to stamp duty. Assuming it is a blood relative - say brother or sister - and the property is being gifted in Karnataka (Bangalore), there is a reduction in the value of the stamp duty. Usually, stamp duty is payable on a percentage of the market value of the gift property. When gifted to a brother or sister however, it varies between Rs. 3000 and ₹5,000 as per the Karnataka Stamp Act.
