The Private Client team at Cyril Amarchand Mangaldas shares their comments and opinions shared in an article in the following Q&A which was published by the Mint Newspaper on 26th May, 2020 and the online edition of the same can be found here.
My parents have a flat in a housing society in Gurugram and it’s in their joint names. My father is no more and according to his Will (not registered or probated but notarized and on stamp paper with two witnesses), all his property and wealth went to my mother. Now, she has a Will, dividing all her fixed and movable wealth among her three children. If we need to sell the property after our mother dies, what are the steps we should take for smooth sale? The conveyance deed is original, with the names of both my parents. Since we do not live in Gurugram, we want to avoid running around to different departments. Can you give us the right procedure? Is there any agency that can help us in Gurugram? Will there be any tax liability at the point of sale? Who will need to bear it?
For the smooth sale of the property post the demise of your mother, the originals of the following documents should be accounted for: Will of the father; conveyance deed through which the parents acquired the property, together with any previous title documents, which the parents have assumed custody of while purchasing the said property; share certificates if issued by the society; property tax receipts; and Will of the mother.
To sell the property, the legal heirs will need to obtain a certificate from the office of the tehsildar, recording the names of the legal heirs. The certificate along with the Wills of parents should then be produced before the Municipal Corporation of Gurugram and the housing society for mutating the property in relevant government revenue records and in the records of the housing society.
Once the property has been mutated in the name of the legal heirs, they shall be entitled to sell the property. Note that there are no specific agencies, which can assist you in carrying out the above.
Regarding tax liabilities, the seller may be subjected to capital gains tax. A buyer will also have to deduct 1% of the sale consideration at source (only if the consideration is above ₹50 lakh) while making the payment, for which a tax deducted at source (TDS) certificate will be issued.
We are five siblings—four sisters and me. I am the eldest. My father had bought a house, but he passed away in 1988 without a Will. My mother was the nominee of the house. Two of my sisters got married when my father was alive and the third in 1992. My mother expired in 2019, nominating my unmarried sister as the nominee. My married sisters are claiming their rights on the house. We are a Hindu family. Can my married or unmarried sisters claim the house?
The succession laws for Hindus are governed by the Hindu Succession Act, 1956. As your father died without a Will, his estate would devolve upon his Class
1 legal heirs. The Class 1 heirs in this case would be your mother, your sisters and you. Such Class I heirs would be granted equal inheritance rights over the property and, hence, each heir would inherit one-sixth of the share in the said property. We are not commenting on any issues of ancestral property, in case the estate had any such asset.
In relation to the rights of a nominee, the courts have held that nomination does not amount to beneficial ownership of an asset, and the nominee holds the asset for and on behalf of the legal heirs of the deceased, as a trustee until the matter of succession or inheritance is decided and implemented.
The nominee does not obtain an absolute title to the property and the rights of the nominee do not prevail over that of a legal heir. Hence, the Class 1 heirs of your father would inherit the property, and not his nominee (mother). Thus, the property would devolve upon your father’s demise onto your mother, your sisters and you, each of whom shall be entitled to one-sixth share.
Upon your mother’s demise, her share in the property shall devolve on her Class I heirs in equal parts. In simple terms, her estate would devolve upon her children in equal shares. Thus, even your married sisters would get an equal share in your mother’s estate upon her demise.