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Property gifted to brother needs to be shared among all 3 sibling
12-Feb-2023 (In Property Law)
Hello Sir/Madam, We had a 1200sqft land that all 3 sibling bought. All of us decided to construct 3 floors - one floor for each of us. Since banks did not agree to give the loan in all of us's name we sister's did a gift deed on my brother's name. We are done with the construction. Now although I am paying the EMI I can not show it for tax exemption nor can i take a loan on my share of the property to clear a major chunk of the loan. To help solve this can we sisters buy one floor each from my brother -what is the procedure? Will the bank who has given him the loan object?
'Gift' is the transfer from the donor to the donee, voluntarily and without consideration (payment amount). In your query, I am unable to ascertain whether the Gift Deed is registered in accordance with the laws existing at the relevant point of time. If in the gift deed, the donors (the sisters) have mentioned some conditions, stipulations etc., then the donee (brother) may not be the absolute owner of the property. However, it is likely that he is the absolute owner as he has obtained a bank loan and in most cases, banks will ensure that they give the loan only to the owner. In that case, only the owner can claim tax benefits/exemptions etc. accruing out of the property. Therefore, the donors (sisters) may not be able to retrieve any benefits with regard to ownership (such as tax benefits).
Coming to the part about the EMI that you are paying. Why are you paying the EMI? Have you obtained a loan or are you one of the borrowers along with your brother? Are you paying it to the bank or to your brother? If the loan is in your brother’s name, then he has to pay the EMI through his account. So what is the basis of your EMI payments?
Coming to the part about your share in the property. If you have made a gift by a registered deed to your brother but without any conditions, then you cannot claim ownership of the property that you have already transferred to your brother in the form of a gift. It is likely that you are no longer owner of any part of the property. If you wish to buy your share from your brother, you will have to pay the consideration amount to him and treat it as a regular sale (through a registered sale deed). Please explore the possibility of him transferring it to you (sisters) as a gift, as it might save time and money.
This is a gist of my legal advice based on your query. Please note that my legal advice is not final and without looking at the relevant documents and without obtaining further information from you, I cannot give a complete solution. For further clarifications, please contact me through www.lawrato.com
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