Can A Minor Buy A Property In India

While it is legally possible for a minor to own a property in India, the process is governed by strict regulations.

Buying a property in India involves navigating numerous legal complexities, which become even more intricate when a minor is involved. Many people wonder if a minor can legally purchase a property in India. The answer is yes, but with specific conditions and regulations. Understanding these rules is crucial for anyone considering a property transaction involving a minor. In this article, we will explore the legal framework governing property purchases by minors, the role of guardians, and the necessary steps to ensure compliance with the Indian law. Read on to learn everything you need to know about minors buying properties in India.

When can a minor own a property in India?

As per the Transfer of Property Act 1882, a minor can only own property if it is given to him as a gift. In such situations, guardians or parents cannot interfere. A minor is allowed to sign a gift deed as a donee. However, the Registration Act 1908 prevents minors from signing any contract or deed. A person must be at least 18 years old to legally sign a contract and officially own a property.

Can a minor buy property?

Buying a property under a minor’s name is only feasible if it is given as a gift. Although the minor will legally own the property, they are not responsible for its upkeep until they are mature. Once the minor reaches the appropriate age, he can manage the property himself.

A minor can also acquire immovable property using his own funds. In such cases, the agreement, sale deed, or any related document must be signed by the minor’s guardians or parents, who must uphold the highest standards of integrity and ethics when managing the property on behalf of the minor.

How to register a property under a minor’s name?

Registering a property under a minor’s name involves several steps. Here’s a step-by-step guide:

Step 1: Property background check

Before transferring a property to a minor, thoroughly investigate the property’s background. Ensure there are no disputes or pending legal cases concerning ownership. Verify that all bills, taxes, and other dues are fully paid, and there are no liabilities on the property. While this step is not specific to minor property registration, it is essential for any property transaction.

Step 2: Gather documents

The next step involves gathering the necessary documents. This includes the property agreement, survey documents, title deed, payment receipts for property taxes, current owner details, and other legal documents required for property purchase.

Step 3: Transfer process

First, transfer the property to the minor’s guardian, then transfer it to the minor. Stamp duty must be paid during each registration. In many cases, a minor can be named as the owner in the purchase documentation, but it must be under guardianship, with all documentation and signatures provided by the guardian.

Step 4: Final registration

After paying stamp duty, visit the sub-registrar’s office for the final registration process. As with any property purchase, present the property deed documents along with two witnesses, their identity proofs, and passport-size photographs.

It’s essential to note that the process for registering property under a minor’s name may vary depending on specific circumstances. Consulting a legal advisor is strongly recommended to understand the property registration process under a minor’s name before proceeding further.

Can the guardian sell the property under the minor’s name?

While property acquisition by a minor is possible only through a parent or natural guardian, selling property in a minor’s name requires court permission. Section 8(2) of the Hindu Minority and Guardianship Act, 1956, addresses this issue. It states that a minor’s immovable property cannot be charged, mortgaged, or transferred by gift, exchange, sale, or any other mode without prior permission from the court. If a natural guardian transfers or sells the immovable property without following clause (2) of Section 8, the sale is deemed void if the minor contests it. The minor can challenge the sale within the limitation period, which starts after he/she turns 18.

Taxation on property owned by minor

According to the Indian Income Tax laws, a minor can hold up to two properties. The minor can benefit from these properties without facing taxation. Income from a gifted property that the minor and his family uses is not taxable. If a property is rented out under a guardian’s supervision, a standard deduction of 30% on the rental income applies. A property can be bought under a minor’s name only if it is gifted or purchased with the minor’s funds, and it is managed by the parents or guardians.

While it is legally possible for a minor to own property in India, the process is governed by strict regulations and requires careful adherence to legal frameworks. Properties can only be acquired by minors through gifts or purchases made with their funds, under the supervision of guardians. Additionally, any sale or transfer of such properties mandates prior court permission to ensure the minor’s interests are protected. Understanding these legal nuances is essential for guardians and parents to ensure compliance and safeguard the minor’s property rights effectively. Always consult a legal advisor to navigate the complexities involved in property transactions for minors.

FAQs

• Can a minor legally own a property in India?

Yes, a minor can legally own a property in India, but only if the property is gifted to him. As per the Transfer of Property Act 1882, minors can become property owners through gifts, with the property managed by their guardians until they reach the age of 18.

• Can a minor sign a property contract or deed in India?

No, minors cannot sign property contracts or deeds in India. The Registration Act 1908 states that individuals must be at least 18 years old to legally sign any contract or deed, including those related to property transactions.

• How can I register a property under a minor's name?

The steps to register a property under a minor's name include conducting a thorough property background check, gathering necessary documentation, such as the property agreement and title deed, transferring the property first to the guardian and then to the minor with all required signatures from the guardian, and completing the final registration process at the sub-registrar's office with witnesses and required identity proofs.

• Can a guardian sell a property owned by a minor?

A guardian can only sell property owned by a minor with prior permission from the court. According to Section 8(2) of the Hindu Minority and Guardianship Act, 1956, any sale or transfer of a minor’s immovable property without court approval is deemed void if contested by the minor after he/she turns 18.

• Are there any tax implications for property owned by a minor in India?

Yes, there are specific tax considerations for property owned by a minor. A minor can hold up to two properties without facing taxation. Income from a gifted property used by the minor and his family is not taxable. If the property is rented out under the guardian's supervision, a standard deduction of 30% on the rental income applies. The management of these properties falls under the responsibility of the parents or guardians.