FINANCE TIP OF THE DAY
Can you afford your loan?!
Know the quantity of loan you can afford. The banks may sanction loan based on your income but you should look at your monthly expenditure and see if you can afford the maximum that banks offer. As a thumb rule, remember not to let your credit exceed 40% of your income!
Essential facts about inheriting a house!
The loss of a parent or loved elder is a painful incident in our lives. But along with it comes the complications of inheritance of which the most cumbersome is the process of inheriting an immovable property like a house. Where a clear will is absent the disputes regarding actual ownership and rights become a murky affair even among brothers and sisters. Even when there exists a clear will there can be several legal issues regarding inheritance of a house. It is in such circumstances that a good understanding of the rules and regulations governing inheritance of properties comes handy to the average man. Especially if has to face the challenge of placating multiple claimants and heirs.
First Things First
Before laying claim to any kind of property from the deceased one needs to make sure that there are no outstanding debts that have to be paid off. In case there are any debts or outstanding and unsecured loans they will have to liquidate before any division of the property can be thought of. All the heirs have to first agree upon the modus operandi of this debt clearance. In case there is ambiguity in the will and it does not match accurately with the total existing assets mentioned in it, legal advice must be sought while arriving at any kind of settlement. Lack of clarity in the will can lead to serious legal complications at a later stage which can be avoided by working in the right direction in the beginning itself.
Starting the Legal Process
The very first step in the right direction is to get hold of the testator’s will which can be obtained by applying along with the deceased’s death certificate to the district registrar. The registrar will open the sealed will in front of all the heirs and then hand over a copy to each applicant. In case the deceased has nominated only a single heir then only one copy will provided to him. In case there is no will then as per Hindu Succession Act the property will pass on to Class 1 heirs who include spouse, children and mother of the deceased. In case of absence of Class 1 heirs the Class 2 heirs comprising of father, grandchildren and siblings. If the deceased was a woman then the property is equally divided among the husband and children in case the woman has died instate (without a proper will). Incase of the heir being a minor or disabled the property is transferred via a trust at a suitable point of time.
Once the legal ownership of the property for that heir is confirmed the next logical step is to apply for mutation of the house to local municipal authority. It is essential that mutation of the house only helps in updating the records of the government and in no way confirms ownership. However it is an essential step in cementing your ownership on the house. In order to apply for the mutation one needs to deposit all the relevant legal papers of the house, proof of inheritance through the Will, death certificate of the deceased and land records of the said property. A NOC from the other heirs is also required in case of multiple heirs. Any challenge to this application for mutation will be referred to the sub divisional magistrate. However the appeal for dispute must be within 30 days of the mutation order. In the case of multiple legal heirs to the property the mutation will be in name of all the heirs.
Once these legal formalities are over then the heir is at liberty to either reside in it or rent it out. He can even sell off the property at will as he is the sole owner of the house. In case of multiple heirs to the house, it is advisable to mark the division of property among them right at the time of mutation to avoid complications subsequently.
Thankfully, till date there is no inheritance tax in our country and one doesn’t need to pay any additional charges for a house inherited by him. However once the house is legally yours you may have to pay Wealth Tax in case the net worth of all your properties exceeds Rs. 30 L. An inherited house can greatly boost your total asset value or come as a savior in difficult times. Thus knowing the right provisions that are applicable will help you to get what is rightfully yours without any legal delays or hassles.