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Is there a tax-friendly method for dividing my mother’s property?

The following article was first published in the Mint newspaper on 15th August, 2023. The same was written by our Private Client team at Cyril Amarchand Mangaldas, who frequently publish their comments and opinions in the Mint. The online version of the article can be found here.

My father, my sister and I are the sole legal heirs of my mother’s immoveable property situated in Delhi. My father wishes that the said property or realizable value thereof may be shared equally by both the children. What is the suitable, tax-friendly method of achieving this division of property? One simple way could be that my father signs a deed of relinquishment before the mutation of the property. Is there any other alternative method that will be tax efficient and would not entail payment of stamp duty or any other levies?

—Name withheld on request

As per your query, we infer that your mother had acquired the immovable property in Delhi and such property was not inherited by her from any of her parents. We assume that your mother was a Hindu and that she died intestate, i.e. without leaving a will. Under such circumstances, the Hindu Succession Act, 1956, lays down provisions for the division of property of a Hindu female dying intestate.

As per the Act, your mother’s property devolves upon all three of you equally as her class I legal heirs.

Typically, in such cases, the individual holding the one-third share may consider executing a release deed relinquishing his/her share in the property in favour of other heirs having some share in the same property. Another tax efficient method if the intention is to mitigate the impact of the stamp duty or other levies could be your father bequeathing his one-third share in the property in his will.

I am a 70-year-old retired service personnel living with my wife and two children (a daughter and a son). I have prepared a will on a ₹10 stamp paper and got it attested by a notary. Is this will acceptable as a legal document or should I get it registered.

—Ajay Kumar Gupta

There is no requirement for a will and last testament to be notarized or registered. Registration of a will is optional in India and is typically considered by testators to add a layer of authenticity to their wills. Do note that not registering a will before the office of sub-registrar of assurances has no bearing on the validity of such will. The ₹10 stamp paper or the use of a notary have no relevance. Your will would be acceptable as a valid will as long as it is attested by two witnesses who have seen you signing it in person.