Property in India does not transfer itself. Sale, gift, exchange, release, will — five ways it changes hands, and which applies is not always obvious. A brother giving up his share to his siblings is not making a gift. A mutation entry is not a transfer.

A father dies and the house stays in his name. Three brothers agree who gets what, and nothing is written down. A flat sits empty for years because nobody knows how to sell it from Canada.

Getting the instrument right at the start avoids difficulty later. We tell you which one applies, prepare it, register it, and carry the matter through to mutation — so that what you own is recorded as yours, and not left in a name that no longer exists.

Sale

A sale transfers ownership to anyone, for consideration, by registered document. Unlike a release deed, there is no requirement that the buyer be a co-owner or a relation.

You can sell without coming to India. A sale can be executed on a Power of Attorney.

Tax on the sale

Where an NRI sells property in India, the buyer deducts tax at source at the time of sale. The rate depends on whether the gain is short-term or long-term, and the two are treated differently.

The deduction is not the final position. Where more has been deducted than is ultimately payable, the excess can be claimed by filing an income tax return after the end of the financial year.

This is a point on which NRI sellers are often surprised — the amount received on completion is not the amount finally due, and the difference is recoverable.

Exchange

Property can also be transferred by exchange — each party transferring ownership of one property in consideration of the other, rather than for money.

Less common than sale, but it arises: two families swapping adjoining plots, or an owner taking a flat in place of land given to a developer. Like a sale, an exchange requires a registered document to be effective.

Gift deed and release deed

These are not alternatives to one another. They do different things.

A gift deed transfers property without consideration. It can be made to anyone — the recipient need have no existing interest in the property. A gift is not limited to land and buildings; movable assets can be gifted too.

A release deed operates between co-owners who are blood relations. Where family members hold property jointly, typically after inheritance, one may relinquish their share in favour of the others. It presupposes an existing interest, which is what distinguishes it from a gift.

Where three siblings inherit a house and one gives up their share to the other two, that is a release. Where a father transfers a flat to a son who held no interest in it, that is a gift.

For NRIs, the common case is this. A brother settled abroad wishes to give up his share in the family property to his brothers in India. That can be done by release deed, executed on a Power of Attorney — you do not need to travel.

Stamp duty differs between the two, but that is not usually what decides which applies. What decides it is what the parties’ existing rights are and what the donor intends.

Transfer under a will

A will takes effect on death. It records what the testator wanted done with their property, and until they die it transfers nothing — it can be changed or replaced at any time.

A person may make as many wills as they wish during their lifetime. Only the last one operates. An earlier will, however formally drawn, is displaced by a later one.

This matters more than families expect. Where an old will surfaces after a death and nobody knows whether a later one exists, the position can be genuinely unclear — and that is where disputes begin.

Is probate required?

Not as a matter of course. A will can often be acted upon without it.

Probate becomes necessary where:

• The heirs are in dispute and the will itself is challenged
• An institution requires it — a bank, for instance, may not release funds on the will alone
• The property is spread across multiple locations

Where none of those applies, the will can generally be given effect without going to court.

Partition

Where property is held jointly and the co-owners wish to divide it, that is dealt with separately — see our page on partition of property.

Mutation — the step that follows

Whatever the route, the transfer is only half of it.

Mutation does not transfer property. It is entered on the basis of the transfer that has already taken place — the sale deed, gift deed, release deed or will. The instrument effects the transfer; mutation records it.

The authority differs by location. Rural property — the revenue officer. Urban property — the municipal committee or corporation, or the relevant urban development authority.

Until mutation is done, the record still shows the previous owner, and that causes difficulty when the property is next dealt with.

Starting

Tell us what the property is, who holds it, and what you want to achieve. We will tell you which instrument applies and what can be done from where you are.

---

Vaqeelsaab acts for non-resident Indians with legal matters in Punjab and Haryana. Property disputes, title verification, partition, succession, matrimonial proceedings and criminal defence — from our offices in Panchkula and at the District Court, Jagadhri, and before the Punjab & Haryana High Court at Chandigarh.

For matters in Delhi, Rajasthan and Gujarat, we work with counsel in the relevant jurisdiction and manage the matter for you.

Most of it can be handled without you travelling to India.

+91 94160 09800 | info@vaqeelsaab.com