The Tribune, Chandigarh, India

How to transfer property through will
R.P. Malhotra

AN act of taking over the ownership of the title of the assets and property left by a deceased by his legal heirs after his demise is known to be the transfer by succession. Generally, as per prevailing law of the land, the ownership of the title of the property left by the deceased is transferred in the name/s of his legal heirs after duly verifying their antecedents. However, the owner of the property has the right to identify the beneficiaries of his choice, by specifying the ratio of their respective shares of his self acquired assets and properties in the will, which can be bequeathed during his life time. Although not mandatory but to be on the safer side for avoiding any litigation and dispute over the authenticity of will, the documents is, generally, preferred to get registered in the office of the Sub-Registrar of the area. Such a will, executed and registered in the presence of registering authority, is known as registered will. However, a will can be in a shape of a verbal statement and in shape of a written statement supported by, at least, two witnesses of persons of reputation, social status and standing. Such a will is called unregistered will. And if a person dies without leaving any will, it is called intestate death.

Category of legal heirs

Legal heirs are normally categorised in to four categories. Mother and children of the deceased comes in to the A category of legal heirs in case of male and whereas husband and children in case of a Hindu female falls under this category. In the event of none of the legal heirs of category A is alive the assets are distributed equally among category B of legal heirs comprising of brothers, sisters and father of the deceased male and parents-in-law, brothers and sisters of her husband in case of married Hindu female provided that the property and assets has been inherited by her from her in laws. However, if the property has been inherited by her from her parents than the assets shall be transferred to her parents’ side after her death provided that none among her children and husband is alive to stake the claim of the property.

In case none of the legal heirs of both the categories mentioned above is alive to stake the claim than the ownership of title of assets and properties left behind by the deceased gets transferred to the third category, which is further categorised into two categories namely “agnates” and “cognates”. Agnates are the nearest kin among the blood relations/ adopted from male’s side and cognates are the nearest kin among the blood relations/ adopted from female’s side. A female member shall be the last link of chain of descendents among the agnates as well as cognates category.

In case any one of the legal heirs of a person predeceases him then wife and the children of the deceased shall automatically be the legal owners of his share of properties provided that the assets and properties are inherited and not self-acquired one. However, in case of self-acquired assets the possessor/owner has full right to declare the beneficiaries of his assets after his demise in a will during his life time.

Transfer of property in the names of legal heirs

(A) On the basis of registered will

After the death of a person, his/her legal heirs may apply to the revenue authority of the area concerned for the transfer of the respective shares of the assets and properties left by the deceased, in their names. The application giving details of the legal heirs as well as beneficiaries mentioned in the registered will left by the deceased shall also be annexed by a few below mentioned documents, such as:

1. Photocopy of will duly notarized,

2. Translated copy of the will in English, if it is in other language,

3. Liability affidavit of the beneficiaries to certify and affirm to abide by the rules and regulations governing the property and to pay the arrears towards the property,

4. Indemnity bond from the beneficiaries of the will to indemnify the revenue department from any fraudulent transfer,

5. Original death certificate of the deceased owner,

6. Photographs of the beneficiaries.

On receipt of this set of documents the revenue department, after verifying the given information, issues a transfer letter in favour of the beneficiaries of the will of the deceased.

(B) Transfer on the basis of unregistered will

In this case the application for the transfer of property along with following documents shall have to be submitted with the revenue authorities:

1. Photocopy of the will duly notarized,

2. Translated copy of the will in English, if it is in other language,

3. Liability affidavit of the beneficiaries,

4. Affidavits of attesting witnesses to the will,

5. Original death certificate,

6. No objection certificate from all those legal heirs who are not the beneficiaries of the will,

7. Photographs of the beneficiaries,

8. Indemnity bond of the beneficiaries

In both the above cases the department may issue a public notice, in case of doubt, especially in case of unregistered will, in the local dailies in regional as well as English languages, at the cost of the transferees, for inviting objections, if any, to the transfer of property on the basis of will.

(C) Transfer on the basis of registered will outside family

In case where the registered will happens to be in favour of a person/s from outside the family, an additional document of affidavits from the attesting witnesses to the will shall have to be attached along with the documents detailed above in case of registered will.

(D) Transfer in case of intestate death

In this case as discussed earlier, all the legal heirs of the deceased become the beneficiaries of the left over assets and properties in equal shares and the application for transfer from all the legal heirs along with an indemnity bond, liability affidavit from the beneficiaries and their photographs shall be submitted to the revenue authorities for effecting the transfer. In this case issuance of a public notice inviting objections, if any, to the transfer of the assets in favour of the transferees in the two local dailies, one in English and other in regional language, becomes imminent. After the expiry of notice period of 40 days from the date of its publication, the applicant again applies to the revenue authorities along with the proof of the publication for the transfer of the property. The concerned department issues a final letter of transfer in favour of the beneficiaries, in case no objection is filed by any claimant.

PREPARING FOR RETIREMENT
Cover your health
Naveen S. Grewal
Tribune News Service

GOOD health is essential to enjoy a fulfilling retired life. Good planning for a retired life not only involves a sound financial backup for this period, but also needs investment in good health that will minimise expenses at a time when every penny matters. However, the possibility of deterioration in health is likely to increase with old age and there is nothing much one can do about it except purchase a health insurance that takes care of some aspects of medical emergencies.

Unfortunately, not many insurance policies are available to people once they have crossed a certain age. But, however, some options are still available to those approaching the retirement line and to those who have crossed it. The options available to the senior citizens come at a high cost, but sometimes even the high cost of premium is money well spent. Some medical insurance polices that should be explored are being offered by companies like National Insurance, Oriental Insurance, New India Assurance, United India Insurance, Bajaj Allianz, Iffco Tokyo, Reliance General Insurance and ICICI Lombard.

Medi-Claim

The Medi-Claim policy has been designed to cover the policyholder against hefty medical bills for emergencies and hospitalisation. Medi-Claim cover both illnesses and medical emergencies from injuries and covers the room boarding expenses by the hospital nursing home, nursing expenses, operation theatre expenses, surgeon, anaesthetist, medical practitioner, consultants, specialist’s fees. The features of a Medi-Claim policy may differ from one company to another, but one can generally pick up a medi-claim policy for a sum insured ranging from Rs 15,000 to Rs 5 lakh. Though, the policy is technically open to age groups between 5 and 75, but it is easier for a person under 40 to procure a medi-claim policy.

Based on certain options available at the time of purchasing an insurance, the Medi-Claim policy also covers cost of equipment like pacemaker, artificial limbs and charges paid for anaesthesia, blood, oxygen, operation charge, surgical appliances, medicines and drugs, diagnostic material and x-rays, dialysis and chemotherapy, radiotherapy, and cost of organs etc.

It must, however, be kept in mind that the Medi-Claim policy does not cover treatment of certain diseases such as the pre or post hospitalisation treatment of asthma, chronic nephritis, gastroenteritis, diabetes, epilepsy, hypertension, influenza, cough or cold, psychiatric or psychosomatic disorders, pyrexia, tonsillitis, arthritis, rheumatism or any treatment relating to any illness/ disease already in existence at the time of treatment.

Bhavishya Arogya

The Bhavishya Arogya was designed with the specific purpose of providing life time medical benefits after the retirement of the insured. The concept is simple, “you pay premium in equated annual instalments up to the age of retirement and avail medical benefits when you need them most that is after retirement”. The policy provides for hospitalisation and domiciliary hospitalisation benefits, following an accident or sickness. “This scheme is particularly useful bearing in mind that other medical policies have an age limit, while this one has none”, say the experts. The Bhavishya Arogya is open to anyone between age group 25 to 55 years and can be purchased for a cover ranging between Rs 50,000 and Rs 2,00,000.

Jan Arogya Policy

The Jan Arogya Insurance Policy was specifically designed for the lower income group of society with the idea to protect them from high costs of hospitalisation. The policy pays off any claims owing to expenditure arising from hospitalisation from treatment of any illness, injury or disease. The maximum cover that the policy provides for is Rs 5, 000 per person per annum. The premium paid on this policy is exempt under I.T. Section 80 D.

However, it must be mentioned that the policy does not pay for any disease contracted within 30 days from commencement of risk, injury or disease caused by war or nuclear perils, circumcision, routine eye examination, dental treatment, surgery unless hospitalisation is required, expenses on vitamins or tonics, treatments arising from pregnancy/child birth inclusive of caesarean section, cost of spectacles, contact lenses, and cost of hearing aid.

CHECKOUT

by Pushpa Girimaji

Consumers can seek compensation for delays

IN a recent order, the apex consumer court has upheld the right of the consumer to seek compensation from housing agencies for delays in construction, even after taking possession of the house.

Most housing and land development bodies, particularly those run by state governments, do not stick to the promised time schedule for completion of construction and handing over possession, thereby causing the consumer, who would have taken loans to pay for the house, immense hardship and harassment. The decision of the National Consumer Disputes Redressal Commission in the case of Ghaziabad Development Authority vs Gurdutt Pandey ( RP No 152 of 2000) holding that a consumer’s right to redress is not extinguished once he/she takes possession, should bring about an attitudinal change in all these housing bodies, while at the same time, strengthening the rights of consumers vis-à-vis housing agencies.

In this case, Mr Gurdutt Pandey had booked a house in Govindpuram Scheme developed by the GDA and was promised that he would be given possession of the house by November 31, 1990. Even though Mr Pandey deposited the entire amount, he was given possession of the house only in 1995. Following this, Mr Pandey approached the consumer court at the district level, seeking relief by way of interest on the amount paid by him. GDA contended that the delay was caused by circumstances beyond its control and besides, there was a stay on its operation from April 1991 to January 1993 by the Allahabad High Court. After considering all these aspects, the District Forum asked GDA to pay interest at the rate of 18 per cent per annum on the amount deposited by the consumer from January 1994 till the date of handing over possession, besides Rs 1000 as costs. This decision was upheld by the State Commission, following which the GDA filed a revision petition before the National Commission.

The main contention of the GDA before the National Commission was that after having taken possession, the consumer could not have filed the complaint under the Consumer Protection Act. In support of this argument, it referred to the decision of the National Commission in the case of Sarthak Behuria vs the Orissa State Housing Board, where, relying on the decision of the Supreme Court in the case of Premji Bhai Parmar vs Delhi Development Authority, the apex consumer court had commented that “more over after taking possession of the house, the complainants cannot be heard to say that there has been unreasonable delay in the construction of houses”.

The National Commission, after examining these orders, clarified that at no point of time had the Supreme Court laid down any such principle that after possession is obtained, a consumer dispute cannot be raised alleging deficiency in service. And the observation of the National Commission in the case of Sarthak Behuria was confined to that case. “It is difficult to appreciate this argument (of the GDA) that the rights of a consumer which had accrued to him would stand extinguished on his taking possession of the house”, the Commission said.

Observed the apex consumer court further: “We cannot accept the proposition as canvassed by GDA that after possession is taken no consumer dispute can be raised. It is only when possession is taken and a consumer starts living would he know the deficiencies particularly those which are latent in the construction of the house.” Saying that the right of the consumer would be barred only under Section 24A of the Consumer Protection Act which provides for limitation of two years for initiating action, the Commission commented that it would be a dangerous proposition to contend that the right of the consumer gets wiped out on his taking possession of the house.

In some earlier cases too, where consumers had taken possession of the house and then filed complaints, the apex consumer court had awarded compensation for defective as well as delayed construction. However at that time, the consumer’s right to seek redress after taking possession had neither been questioned nor specifically addressed. In the case of Sanjay Nagar Residents vs The Vice Chairman, GDA, for example, (OP no 212 of 1992, decided in 1995), the National Commission had come down heavily on the land development agency for the poor quality of construction and lack of infrastructure facilities and had directed it to rectify within three months the defects in construction. It had also ordered payment of 15 per cent interest on the amount paid by the allottees, calculated from the time of handing over the flats till the time the GDA rendered the housing complex fit for occupation. It had also awarded each of the allottees Rs 15,000 for the inconvenience and harassment undergone.

Similarly, in the case of Surendra Kumar Jain vs Lucknow Development Authority (FA no 55 of 1991, decided in 1993) the apex consumer court had directed the LDA to pay 16 per cent interest on the amount paid by the consumer, for the inordinate delay in handing over possession. Now the decision of the Commission in the case of Gurdutt Pandey reinforces further, the rights of consumers in such cases.

MARKET UPDATE

by Lalit Batra

Profit-taking continues

IT stocks firmed up during the week riding on the back of FII buying in Satyam Computers and Infosys. There was a selling pressure in the stocks of publiC sector undertakings (PSUs) due to fears about the future of government’s disinvestment programme. The Sensex rose by 6.26 points for the week to settle at 2,956.84. The S&P CNX Nifty gained 0.5 per cent at 956.95.

There were renewed concerns on the disinvestment front, after reports indicated that the Prime Minister’s Office (PMO) has directed the Disinvestment Ministry not to send any more bidders to Orissa for undertaking due diligence in Nalco, following resistance from various quarters against the privatisation of the aluminum giant.

IT stocks

The frontline IT stocks were in limelight this week on buying by FIIs and retail investors. While Infosys and Wipro gained 4 per cent each to close at Rs 4000 and Rs 1420 respectively, Satyam gained 2.75 per cent to close at Rs 243.

Indian IT companies are going to benefit from increasing outsourcing through of shore deals. The outsourcing contracts worth $ 70 million from Lehman Brothers to the TCS and Wipro are reportedly about biggest IT outsourcing deals coming to the Indian software service industry. This will set the ball rolling for other IT companies. The Infosys counter was also ruling firm as a result of rumours that the software bellwether may gain a higher rating in the Morgan Stanley Capital Internation Index (MSCI) to be a recast shortly.

PSU stocks

PSU stocks were at the receiving end during the week due to the deadlock in disinvestment. These concerns have resurfaced due to the Nalco imbroglio. The due diligence in Nalco has been put off for now following resistance from various quarters against the privatsation of the aluminium giant. According to the reports Congress Party activists and Nalco workers stopped Hindalco officials from entering the smelter. When the latter came for the due diligence exercise. Nalco stock lost 21 per cent during the week to close at Rs 72.

Coming fortnight

The Sensex is likely to remain in a trading range in the next few days of the coming week, as there are a few signs of the ongoing correction in the index. On the downside if the index breaks 2954, it may slide to the 2932 level. The correction in the index may be slow and the slide gradual. Once the correction is over, the index may head for 3040. Overall the activity is going to be stock specific.

ANALYST’S DIARY

by Ashok Kumar

Imperfection is name of this game

DURING the course of being associated with the capital markets over the last decade and a half, I have had several interesting experiences. A recent one that comes to mind is that of a person I met on my return flight from Kuala Lumpur. He informed me that he had invested a fairly large sum in the equity segment of the market, but in just three stocks, namely, Satyam Computers, Bajaj Auto and Dr Reddy’s Labs.

The choice of these three scrips, he opined, reflected adequate diversification and potential growth. On knowing that I make a living commenting and advising on investments, he requested me to ask my team to keep him posted on our house view on these three stocks.

Hereunder are some excerpts from a recent report that our team mailed out to him.

Satyam’s revenues were up 7.6 per cent sequentially and 17 per cent YoY. EBIDTA was up 9.6 per cent sequentially and 5.9 per cent YoY. Profits up by 8.9 per cent sequentially and down by 12.3 per cent YoY. EBIDTA margins expanded by 30 bps sequentially. It expects further EBIDTA margin expansion in the coming quarters.

The company saw marginal declines in both onsite and offshore rates. The company had a loss of about Rs15.5 crore on account of rupee appreciation.

The impact was so huge that Satyam cited it as the main reason for revising its FY03 earnings guidance downward by around 6-7 per cent.

The share may not fall further from the current level of around Rs 210 as it appears that the downward revision in earnings has been already factored in.

Bajaj Auto announced a 12 per cent YoY rise in revenue for second quarter ended September, 2002. Operating profits are up by 50 per cent YoY aided by margin expansion from 15.3 per cent to 20.6 per cent. Excluding extraordinary income of insurance premium received from Allianz in the corresponding quarter last year, the net profit has actually leap-frogged by 88 per cent.

Notwithstanding long term initiatives for growth like product introductions, exports and Kawasaki outsourcing, the key question now is — has Bajaj Auto’s performance peaked and can it sustain its growth momentum? We suggest avoidance of fresh positions at this counter.

Dr Reddy’s has registered a decline in turnover and profits. The drop in sales is primarily due to slowdown in fluoxetine sales, which has reflected across the income statement. The company has continued to show good growth in active pharma ingredients (API) business and branded formulations. The Net profit has witnessed a fall of 31 per cent to Rs 99.2 crore and net sales declined 13.45 per cent to Rs 427.8 crore for the second quarter ended September ‘02.

Moving towards a research-oriented business model has lead to lumpiness in earnings. However, the export growth story of the company remains in place with continuing generics momentum and the company penetrating further into new markets. The stock price should bounce back from the Rs.680 levels.

As to why this gentleman has placed all his faith in these three stocks is something that remains a mystery to me, and I guess it will remain that way, as he too has no logical explanation for the same. Well, like I never tire of telling my management students — investing is an art, not a science and thus imperfection is the name of the game.

TAX & YOU

by R.N. Lakotia

Tuition fees

Q: I am a Punjab Government employee. Recently I have got my son admitted in Engineering College, Moga under Punjab Technical University, Jalandhar. I have paid tuition fee of Rs 27,000 at the time of admission.

Is this tuition fee exempted from Income Tax. If yes, under which rule.

— Krishan Paul, Mukerian, Hoshiarpur

Ans: The tuition fee paid on your son’s admission under Punjab Technical University does not enjoy any tax benefit.

Senior citizen

Q: My date of birth is February 2, 1939. I will be entering 65 years of age in February 2003. I understand that I am eligible for benefits available to a senior citizen (65 years) under the Income Tax for all payments received during the entire financial year 2002-2003, even though I cover only 2 months as senior citizen in the financial year. Please clarify.

— Ramesh K. Aggarwal, Jalandhar

Ans: You would not be eligible for tax rebate permissible to a senior citizen because during the financial year 2002-2003 you would have completed 65 years of age. Please remember that this rebate is permissible on completion of 65 years of age and not on starting of 65 years of age.

VRS

Q: I have opted for voluntary retirement and I am likely to get Rs 10 lakh plus P.F. and gratuity amounting to about five lakh.

Please advise about its investment so as to minimise present and future Income-Tax payable my me.

— H.S. Ahuja, Ludhiana

Ans: The best investment for your retirement benefits is in the 8 per cent Tax Free Bonds of the Reserve Bank of India after making investment of Rs 60,000 in the PPF A/c.

Car loan

Q: I am a government employee. I have purchased a car in January 2000 at the cost of 2.70 lakh taking loan from bank for personal use.

I want to know that can I get any rebate on income-tax? My monthly expenditure to maintain car is approx 1000 p.m. Detail of my salary for F.Y. 2002-03.

Total taxable salary income: Rs 1,47,000

Saving under Section 88 is: Rs 75,000

— V.P. Upadhyay, Bilaspur

Ans: You will not be entitled to any tax benefit or deduction from your salary income on the loan taken for your personal car.