Examining A Muslim Woman’s Right To Property

1
muslim-women

Article 14 of the Indian Constitution mandates equality among all its citizens. With the interesting interplay of socio-legal forces, Hindus, Muslims and Christians in India are governed by their respective personal laws – which includes property rights as well. As Muslims in the country do not have codified property rights, broadly speaking, there are governed by either of the two schools under the Muslim law – the Hanafi and the Shia. In India, a large number of Muslims are Hanafis or Sunnis. While the Hanafi school recognises only those relatives as heirs whose relation to the deceased is through a male. This includes son’s daughter, son’s son and father’s mother. The Shia school, on the other hand, favours no such discrimination. This means that heirs, who are related to the deceased through a female are also accepted.

A few general rules of inheritance for women are:

The daughter

Under the Muslim law, the laws of inheritance are rather strict. In keeping with its ideology that a woman is half the worth of a man, a son takes double the share of a daughter. But the daughter is the absolute owner of whatever property she inherits. If there is no brother, she gets half a share. It is legally hers to manage, control, and to dispose off according to her wishes.

She is eligible to receive gifts from even from those she would inherit from. This is contradictory because she can inherit only one-third of the man’s share but can get gifts without any hassle.

Till a daughter is not married, she enjoys the right to stay in her parents’ house and seek maintenance. In case of a divorce, charge for maintenance reverts to her parental family after the iddat period (approximately three months) is over. But, if her children are in a position to support her, the responsibility falls on them.

The wife

In the famous Shah Bano case, the Supreme Court had held that in case of a divorce, it is the responsibility of the husband to make reasonable and fair provision to maintain his former wife even after separation under Section 3 (1Ha) of the Muslim Women (Protection of Rights on Divorce) Act, 1986. This period extends beyond iddat as the woman retains control over her goods and properties.

In the event of the death of her husband, a widow gets the one-eighth share (when there are children) but will get one-fourth share (if there are no children). If there is more than one wife, the share may diminish to one-sixteenth.

The mother

A Muslim mother is entitled to inheritance from her children, if they are independent. She is eligible to inherit one-sixth of her dead child’s property if her son is a father as well. In the absence of grandchildren, she would get the one-third share.

What more?

There are other provisions, too, in the law which ensure financial security of a Muslim woman.

 The maher (entitlement)

This is the total money or property that a wife is entitled to get from her husband at the time of marriage. There are two types of maher: prompt and deferred. In the former case, the amount is given to the wife immediately after marriage; in the later, the amount is given to the wife when her marriage has ended, either upon the death of her husband or by divorce.

The wasiyat (will)

A Muslim cannot give away more than one third of his/her total property through a will. In circumstances where there are no heirs in the estate as prescribed by law, the wife may inherit a greater amount by will.

The hiba (gift)

Under the Muslim law, any type of property may be given as a gift. For a gift to be valid, a declaration of the wish to make the gift must be made which should be accepted by the receiver.

Completion of Construction and its Importance Under Income Tax Laws

0
Completion of Construction and its Importance Under Income Tax Laws
Completion of Construction and its Importance Under Income Tax Laws

There are a number of income tax provisions, which link the benefits with the time taken to complete the construction of one’s property.

Deductions pertaining to repayment of the principal component of a housing loan

Section 80C provides tax benefits on the repayment of a home loan’s principal component, up to Rs 1.50 lakhs. In case of an under-construction property or for self-construction of a property, your EMIs do not start till the entire loan amount is disbursed and this generally coincides with the completion of construction. In case of any inordinate delay in construction, your EMI may start even before completion of the construction. In such a situation, you will not be able to claim tax benefits on principal repayments, as the same is allowable only in respect of a property, income from which is taxable under the head ‘income from house property’. Unless the property is completed and its possession taken, the same cannot become taxable. Therefore, in case of such delays, you lose the benefit available on repayment of the principal amount of the loan, before taking the possession.

Deductions pertaining to interest paid on loan taken for construction of a house property

Section 24 of the Income Tax Act provides deductions, with respect to the interest paid on money borrowed for the purchase, construction, repairs, renovation or reconstruction of a house. Unlike Section 80C, Section 24 allows you to claim tax benefits on the interest paid during the period before you took possession (referred to as pre-EMI interest), in five equal instalments beginning from the year of completion of construction. Consequently, if there are delays in completion of construction, your right to claim the interest paid on the loan will also be delayed.

Moreover, the period taken for completion of the construction, will also determine the amount which you can claim for interest, in case the house is self-occupied. If construction is completed within five years from the end of the financial year in which the money was borrowed, you can claim interest up to Rs 2 lakhs. However, in case the delay exceeds five years, your entitlement gets curtailed to Rs 30,000 in a year.

This amount of interest entitlement is for the current year’s interest, as well as for amortised portion of the pre-EMI interest, taken together. It may be noted that for a let-out property, you can claim full interest benefit, even if construction is delayed.

See also: 

Importance, for claiming exemption on capital gains

Section 54 and 54F provide for exemption from long-term capital gains tax, if the gains are invested in a new house that is constructed within three years. However, in the case of Kishore H Galaiya Vs ITO, decided in 2012, the Mumbai tribunal held that even if a substantial amount is invested/spent for construction of the house and even though construction is not completed in three years, the exemption under Section 54 and 54F would be available. However, in case of delay in completion of construction, the income tax officer may take a different view and you may have to file an appeal with a higher authority, to claim the exemption. Hence, it is always advisable to ensure that the construction is completed within three years, to avoid any litigation.

Stamp Duty and Registration Charges Income Tax Exemption

0
Stamp Duty and Registration Charges Income Tax Exemption

Taxes and duties constitute a large part of the total home buying cost. There are four types of taxes and duties that are levied on the purchase of homes in India – stamp duty, value-added tax (VAT), service tax (ST) and registration charges. The rate or amount of stamp duty, VAT and registration charges, may vary from state to state, whereas service tax comes under centre’s control.

Stamp duty

Stamp duty is payable to the state government. Payment of this duty denotes the legal status of the transaction. A sale agreement that is not appropriately stamped, is not acceptable as confirmation in the court of law.

Value-added tax (VAT)

“VAT is typically levied on the sale of goods and is applicable for house property, as it involves the transfer of ownership rights from the seller to the buyer. It is pertinent to note that VAT is applicable, only in the case of under construction properties,” explains Gautam Saraf, managing director, Mumbai, Cushman & Wakefield.

Registration charges

The agreement executed between the buyer and seller (owner/developer) of a house property, should compulsorily be registered, as per the Registration Act. If the agreement is not registered, it is not admissible as evidence in a court of law.

Service tax

Service tax is payable to the central government. This charge is only applicable for under construction properties. Service tax is charged at a specific rate on the basic cost of the property (cost of land and construction) and at a different rate on other cost items, such as preferential location charges, floor rise charges, initial maintenance charges, club house, etc.

See also: Property Registration transactions in Indian Law

Who should pay these charges?

“Payment of stamp duty and registration charges is the responsibility of the buyer. However, due to poor market conditions in recent times, some developers have offered to bear this cost. With respect to service tax and VAT, it is the responsibility of the developer to collect it from the buyer and deposit it with the concerned department,” informs Nishant Agarwal, MD, Avighna India.

If the stamp duty and registration charges are not paid, the registration procedure itself will not be complete and therefore, the property would not be legally transferred in the name of the buyer.

Are taxes the same for all classes of home buyers?

According to experts, most of the above taxes and charges are applicable on a similar basis, to all categories of home buyers, except for service tax. The service tax brackets are as follows:

  • If the value of the house property is more than Rs 1 crore, then the service tax chargeable is 4.50% on the sale consideration and 15% on floor rise and other charges.
  • If the value of the house property is less than Rs 1 crore, then, the service tax chargeable is 3.75% on the sale consideration and 15% on floor rise and other charges.

Taxes on an under-construction Vs ready-to-move-in home

Agarwal further explains, “From a tax perspective, the following points are important for home buyers:

  • In the case of an under-construction property, all the taxes are applicable.
  • In the case of ready-to-move-in homes, where the buyer is buying from a developer and the occupancy certificate and completion certificate have been received, service tax is not applicable.
  • In the case of ready-to-move-in homes, where the buyer is not buying from a developer, service tax and VAT are not applicable.”

Price-monitoring Structure Under GST In The Pipeline

0
Price-monitoring Structure Under GST In The Pipeline

The government is considering a price-monitoring mechanism under the proposed goods and services tax (GST) to ensure that the multiple benefits of the landmark reform are passed on and head off any unwarranted price shocks. States are also keen to ensure that the effects of GST provide a demand push to the economy.

“A mechanism will be put in place to keep a tab on prices,” said a senior official aware of deliberations before the GST Council meets later this week to decide on key issues, including the tax rate.

The government is keen to put GST in place on April 1, 2017. The incidence of tax on goods is expected to fall sharply under GST, widely seen as India’s biggest reform since independence.

It will replace multiple central and state taxes, creating a national market. GDP growth is expected to get a boost of up to 2 percentage points from the reform with the bulk of benefits going to industry that will see logistics costs and taxes decline.

The government wants to guard against profiteering by companies that will benefit from seamless input credit or tax on tax. This was among the points raised by some members of the empowered committee of state finance ministers at its last meeting.

Tax experts said a price-monitoring system without legislative backing may not be effective but suggested additional compliances that could be imposed.

“The government clearly wants to ensure that GST does not lead to price increase and inflation. However, I am not sure if any price monitoring system would be effective, particularly if it does not have legislative backing,” said Siddharth Mehta, partner, PwC India.

He said this could lead to complicated compliance paperwork and avoidable disputes between government and industry and the former should instead ensure that the GST rate is moderate and credit system smooth.

LOW TAX RATE

The implementation of GST in some countries fuelled inflation and the government is keen to prevent a similar situation by starting with a low tax rate.

ET view: Broaden the Tax Base

A price monitoring mechanism is fine. But the government should desist frequent tinkering of rates to grant sector specific sops. Some experts favour setting GST rates low to start with. The other option is to have multiple rates. This makes eminent sense and will work in India just as in the EU where VAT rates vary across member states. Including large chunks of the economy in the tax base and keeping sops to the minimum will help lower GST. A wider base gives leeway to lower GST that allows credit for input taxes paid across the value chain, makes production efficient and lowers retail prices.

Request a Call Back

Stay Connected

6,408FansLike
124FollowersFollow
481FollowersFollow
786FollowersFollow
0SubscribersSubscribe
Noida,IN
haze
20 ° C
20 °
20 °
68 %
1.5kmh
76 %
Wed
31 °
Thu
30 °
Fri
29 °
Sat
29 °
Sun
26 °

Latest article

खूब बिक रहे हैं मकान, तीन महीने में हुई रिकॉर्ड बिक्री, ग्रुरुग्राम नहीं नोएडा...

देश के शीर्ष नौ संपत्ति बाजारों में चालू वर्ष की जुलाई-सितंबर की तिमाही में घरों की बिक्री में 24 प्रतिशत की बढ़ोतरी हुई है....
Gaurs Group Q2 sales bookings jump six-fold to Rs 1,320 cr in NCR

Gaurs Group Q2 Sales Bookings Jump Six-Fold to Rs 1,320 cr in NCR

Realty firm Gaurs Group reported six-fold jump in its sales bookings to Rs 1,320 crore during the second quarter of this fiscal on improvement...
Noida Metro On The Fast Track To Introduce ‘Express’ Services During Peak Hours

Noida Metro On The Fast Track To Introduce ‘Express’ Services During Peak Hours

Noida plans to unveil a metro version of the fast local train services on the lines of Mumbai and Kolkata, reports Financial Express. The Noida Metro Rail...
10 Tips To Find The Home Of Your Dreams

10 Tips To Find The Home Of Your Dreams

Finding your dream home is a lot like finding the perfect partner. It might take a while, but when you find the one, you...
Centre Approves Land Pooling Policy For Delhi

Centre Approves Land Pooling Policy For Delhi

The Centre has approved a land pooling policy for Delhi, which will allow the city to get 17 lakh housing units capable of accommodating...
From Leasehold To Freehold? Noida To Decide At Meeting On October 25

From Leasehold To Freehold? Noida To Decide At Meeting On October 25

Noida Authority will take a final decision on whether the residential properties in the city will remain leasehold or be allowed to become freehold, the day...
Greater Noida Development Body To Allot Over 1,200 Flats From Oct 10

Greater Noida Development Body To Allot Over 1,200 Flats From Oct 10

The Greater Noida Industrial Development Authority will allot 1, 246 ready-to-move in flats to buyers at two locations from October 10. The possession of...
Maps Of Buildings Up To 1,000 Sq M Can Now Be Approved Online

Maps Of Buildings Up To 1,000 Sq M Can Now Be Approved Online

The Noida Authority on October 1 started a process to examine maps of residential and industrial properties up to 1,000 square metres online. Officials said if the...
Banks Hike Rates Before RBI's Monetary Policy

Banks Hike Rates Before RBI’s Monetary Policy

For the third time in a row, banks have moved ahead of the central bank in deciding interest rates. With less than a week...
Ghaziabad Development Body Plans To Regularise 321 Colonies

Ghaziabad Development Body Plans To Regularise 321 Colonies

The Ghaziabad Development Authority is working on a plan to regularise 321 colonies that have been identified as illegal by the agency. The GDA plans to...

Request a Call Back