Family Property Settlement Agreement India

9. April 2021

The courts have decided that, as part of a family agreement or division, any transferred property cannot be taxed below capital income. Such a distribution of assets under a family plan cannot be construed as a „transfer“ for capital acquisition purposes. As a result, there is no obligation to pay capital gains tax under Section 45 of the Income Tax Act, 1961. The High Court in Commissioner of Gift Tax (CGT) v. K N Madhusudan has decided that the term „transfer“ in Section 45 does not include a family division or tally within the meaning of the Income Tax Act. The facts recorded in the family colony are similar to a division and therefore cannot be imposed. Family members who are under the agreement have a prior title to the property that is the subject of a division or family agreement. Thus, in the context of the family settlement, the shares are being adapted, the respective rights of the family property crystallized and therefore cannot be construed as a transfer under the statutes of taxation. Therefore, since there is no transfer in the eyes of the law, there is no capital gain and, therefore, no capital tax can be imposed on such a transfer. In the case of the Commissioner of Income Tax (CIT) v. A.N.

Naik Associates, the parties have decided, through the family settlement protocol, that the activities of six companies mentioned in that company will be distributed within the family plan, as the parties are separated and distributed by the parties on various issues related to the activity and related assets. Under the terms of the comparison, it was determined that the assets to be distributed in the comparison were held by the companies and the various partners. For businesses, the way in which businesses should be rebuilt through retirement and the approval of new partners has also been defined. On the basis of these documents and subsequent acts of retirement from the partnership, an order of appreciation has been established in which the respondent is taxable on capital income. The Tribunal found that the transaction was still ongoing and that there was no dissolution of the business and that, therefore, section 45, paragraph 4 of the act had not been attracted. That it be declared and agreed between the parties that this family plan agreement will put an end to all disputes between the parties regarding the respective rights and rights of the parties to the common family property and that the parties recognize and recognize the reciprocity rights of their respective real estate in accordance with this family settlement agreement. About 66 percent of cases involving judicial intervention are property-related disputes, according to a study by the NGO Daksh. 10% of them are in family matters.

Problems may arise due to the absence of a registered will or someone tries to challenge the will. Some also try to resolve problems amicably through a family comparison contract that shows how family members have agreed on the distribution of the property between heirs or beneficiaries. The inheritance tax of family members is created either by a will executed under the Indian Succession Act of 1956 or by the laws of the estate of wills, under personal law. Format and requirements of a family comparison contractIn addition, the family facility may be limited to property, but may also include personal assets such as cash, money in bank accounts, cars, bicycles, jewelry, etc. However, a family comparison contract is generally used to settle common property, including family ownership or co-ownership, in relation to acquired or individual property.