ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN INDIA]

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cannot be revoked; (iii) gifts made to relatives defined by the Income Tax Act, 1916 are exempt from tax in the hands of the donee. 6.3. Lease Section 105 of the Transfer of Property Act, 1882 states that a lease of immovable property is a transfer of a right to such property, for a certain time in consideration of the price paid or promised or any other thing of value, to be rendered periodically on specific occasions to the transferor by the transferee, who accepts the transfer on such terms. In simple terms, a lease is a contract that outlines the terms under which one party agrees to rent property owned by another party. It guarantees the transferor, tenant, use of an asset and guarantees the transferor, the property owned or landlord, regular payments from the transferor for a specific number of months or years. 6.4. Inheritance or Will After the death of a person, his property devolves in two ways - according to his Will i.e., testamentary, or according to the respective laws of succession, when no Will is made. In case an individual dies intestate (no Will is made), the laws of succession come into play. The law of succession defines the rules of devolution of property in case a person dies without making a Will. These rules provide for a category of persons and percentage of property that will devolve on each of such persons. Under the Indian Succession Act 1925, a Will is a legal declaration of the intention of the testator, with respect to his property which he desires to be carried

into effect after his death, however certain formalities must be complied with in order to make a valid Will. It must be signed and attested, as required by law. A Will is primarily intended to dispose of property in the manner the Testator desires. 7. REGISTRATION AND MUTATION OF LAND RECORDS The registration of a property involves adequate stamping and paying the registration charges for a sales deed and having it legally recorded at the sub- registrar’s office. If the property is purchased from a developer, registering the property amounts of an act of legal conveyance. If it is the second or third transaction for the property, it could involve a duly stamped and registered transfer deed. The second step after registering a property is Mutation of land records with respect to the same. Mutation refers to the change of title ownership from one person to another when the property is sold or transferred. By mutating a property, the new owner gets the property recorded on his name in the land revenue department and the government is able to charge property tax from the rightful owner. The documentation procedure and the fee payable vary from state to state. In case of ownership related to land, mutation is considered a vital document. 8. REAL ESTATE INVESTMENT TRUST REIT is an acronym for Real Estate Investment Trust, which is basically a company which develops and own ‘income producing’ real estate propert ies. Initial Public Offering of India’s first REIT was launched on 18 th March’19. Shares of Indian

ILN Real Estate Group – Buying and Selling Real Estate Series

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