Property disputes….broken families….there are no words to describe why you need to safeguard your inheritance. If you do not safeguard your inheritance, encroachers and squatters could take over your house. Driving them away from your house can take a life time. Legal battles in the courts can take years to resolve. Imagine what would happen if you lost the court battle? No inheritance…No money and house to enjoy….There’s worse to come…Your spouse and children could blame you for not safeguarding your inheritance. What would they say? How nice it would be if we had our own house. Everybody has an inheritance…Why should we lose our inheritance? Protecting your inheritance is your duty. Can you run away from your duty?
Inherited a house from your grandfather? First things first…own the house. Your inheritance is yours only if you own it. Get the house transferred in your name. How do you do this? The first step…Get your grandfather’s WILL where it is stated that he has bestowed his house to you. File an application along with the death certificate of your grandfather, to the district registrar. The district registrar will open the sealed cover of the will in your presence. You get a certified copy of the will issued to you. Now you can transfer the house in your name.
There are no free lunches in this World. Even getting your inheritance is hard work. You got the copy of the WILL. Now what…Get the house transferred in your name. Apply at the sub-registrar’s office to get the house transferred in your name. You need to produce documents showing your grandfather owned the house. Title deed which is clear and marketable and encumbrance certificate showing the house is free from mortgage. This is a must. One document you cannot forget? This is the Khata. Khata shows that there is an entry of your grandfather’s house in the Municipality records. You have a record of the house in your grandfather’s name and proof that he was paying the property tax. Now you can get the house transferred in your name.
The next step is very important. Apply for the mutation of the title of the house. Mutation means the transfer of the title of the house from your grandfather’s name to your name, in the land revenue records. To pay property taxes or even get a utility connection (water or electricity connection), doing this is a must. Mutation is done at the local municipal authority office, under whose jurisdiction your inherited house falls. You may have to pay a fee for the mutation of the house.
Homes cost a lot of money. Many citizens of our country, who cannot afford to buy a home with their savings and investments, opt for the home loan. Home loan might take several years to repay. Thankfully, the house you inherited had no outstanding home loan against it. Your grandfather was a very careful man…He borrowed and he repaid. But what if your inherited house had an outstanding home loan against it? Just as you inherit assets and property, you also inherit loans and disputes (Battles in court where heirs fight with each other for the property). What does this mean? Simple…you will have to pay back the home loan and then take possession of the house. What if a home loan insurance was taken to cover this home loan? The insurer will pay back the pending amounts on the home loan. After the insurer has made the payment, you will have to collect the loan clearance certificate and the original documents of the house from the bank. You can now take possession of the house. Now you know why a home loan insurance plan is so important.
You have inherited a house from your grandfather and fortunately for you, India does not have inheritance tax. Estate duty prior to 1985 was as high as 85%. This has been abolished. But have you escaped the taxman? No…..You still have to transfer the title of the house, from your grandfather’s name to your name. To do this you have to pay stamp duty and registration charges which depends on the State in which you reside. This can be as high as 10% of the guidance value of the house. For those who don’t know, guidance value is the value of the land as determined by the Government. Yes…you have to pay a lot of money in stamp duty and registration fees.
You have inherited saving bank deposit, fixed deposit, debentures, equity mutual funds and stocks, from your grandfather. These are movable assets. The first thing you do… get all the equity mutual funds, stocks, fixed deposits, savings bank deposits and debentures in your name. To do this, you need to show documents of proof that your grandfather owned these movable assets. You also need a certified copy of the WILL.You will have to pay tax on the interest from your inherited savings bank account, fixed deposit and debentures. The interest is added to your taxable salary and you are taxed as per the income tax slab you fall under.
Want to know more about safeguarding your interests from the taxman? The team of wealth doctors at IndianMoney.com is always there to help and guide you. You can explore this unique Free Advisory Service just by giving a missed call on 022 6181 6111. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.