Prajna Capital - An Investment Guide

Transfer of property is handing over possession from one person to another. The Transfer of Property Act 1882 contains specific provisions on what constitutes transfer and the conditions attached. According to the Act, transfer of property means, 'an act by which a person conveys property to one or more other persons, or to himself and one or more other persons'. The transfer may be in the present or for the future. Further, 'person' may be an individual, company, association or a body of individuals. Under the Act, property of any kind may be transferred. Every person who is competent to contract is competent to transfer property either wholly or in part. He should be entitled to the transferable property, or authorised to dispose off the transferable property if it is not his own. The right may be either absolute or conditional. A transfer of property may be made without writing in cases where it is not expressly required by law. It can be transferred eit...

Any gain or loss arising on transfer of property is subject to the tax provisions under the head 'capital gains'. Under the provisions of Section 2 (14) of the Income Tax Act 1961, 'capital asset' means property of any kind held by an assessee. It does not include certain items like stock-in-trade, consumables or raw materials for business, and personal effects and certain agricultural categories of land. Any real estate, including a flat, building, site, farm house, and commercial property is subject to capital gains on sale or transfer. It is not only sale of property which triggers off capital gains. Even certain specified forms of transfers are deemed as sale, and any gain is subject to capital gains tax. Transfer of property means a person conveying property, in the present or future, to one or more other persons, or to himself. Any income arising on transfer of a capital asset is subject to capital gains tax. Transfer is deemed to have taken place on the da...