Transferring an apartment to a child is a common estate-planning decision. Families usually choose between a gift deed and a will—each with its own legal, tax and personal implications.
A reader writes: My uncle wants to transfer ownership of his ₹80-lakh apartment in a co-operative housing society to his daughter. The society secretary says this can be done only through a gift deed. Is that correct?
This is a question many families face, often without clear guidance. Estate and succession planning in India remains largely ignored until a crisis arises. When property transmission is not planned properly, heirs can be left dealing with delays, disputes and avoidable legal hurdles.
In reality, your uncle has more than one option to transfer the flat to his daughter. A gift deed is the most commonly used route, but it is not the only one.
A gift deed allows your uncle to transfer the apartment during his lifetime. Since a father is treated as a “relative” under the Income Tax Act, there is no tax liability at the time of making the gift. Stamp duty and registration charges, however, will apply as per state rules.
Tax implications arise only if the daughter sells the property in the future. In that case, capital gains tax will be calculated based on the original purchase cost incurred by the father, not the value at which the property was gifted.
From an administrative perspective, housing societies usually prefer a gift deed because ownership changes immediately and cleanly, avoiding posthumous paperwork.
A will works very differently. Ownership does not transfer during the owner’s lifetime, allowing your uncle to retain full control of the property. He can live in it, rent it out or even change the beneficiary later.
However, a will comes into effect only after death, and the process of mutation can take time. While a registered and clearly drafted will significantly reduces the risk of disputes, heirs may still face procedural delays, especially if objections are raised.
Convenience: A gift deed ensures smooth and immediate transfer, with minimal future paperwork.
Personal security: Gifting property means giving up ownership now. The donor should retain enough assets in his own name to ensure long-term financial independence.
Flexibility: A will offers greater control and flexibility, but with the risk of delays after death.
Some families explore private trusts for estate planning, but these are generally suitable only for larger asset bases and are rarely practical for a single residential apartment.
If your uncle is comfortable transferring ownership immediately and has sufficient assets for his own security, a gift deed is usually the most straightforward option. If he prefers to retain control of the property for life or has personal concerns, a will may be more appropriate.
In either case, proper legal drafting and registration can save heirs significant trouble later—and ensure that a lifetime asset passes on smoothly to the next generation.
(By arrangement with livemint.com)
