Land, property, and gold - these have been the main indicators of wealth in India over the ages. This gives rise to the concept of ancestral property, which represents both a legacy and a symbol of ancestral wealth. While social, religious, and economic influences and attitudes have changed considerably, ancestral land and immovable property are still considered sacred in many ways. In many cases, such ancestral property may also be the source of family disputes and contention. A clear understanding of who the legal heirs of an ancestral property are, can help resolve most of these and help you plan your financial future.
Ancestral property is an immovable asset inherited by a member of the Hindu Undivided Family through paternal ancestors of four generations. Now, what does this mean? If you inherit a piece of land or immovable property that belonged to your father, grandfather, and great-grandfather without having been partitioned during this time, this is an ancestral property. To be considered ancestral property, it must be -
Four generations of coparceners have claim over ancestral property. This means that if you inherit an asset that is an ancestral property, your children, grandchildren, and great-grandchildren have a claim on it. If the property is divided, each gets an equal share of the property.
The right over the ancestral property is granted by birth and does not accrue on the predecessor's death. It is inherent by birth. This means that if you own an ancestral property, your grandchild will have a right or claim to it even if he/she is an infant.
Heirs or coparceners cannot sell or dispose of the property, gift or will it without the agreement of the others. According to a 2022 Supreme Court ruling, any child born out of a live-in relationship has the same rights to the ancestral property as other coparceners.
Prior to 2005, daughters were considered members of the Hindu Undivided Family (HUF) unit but did not have the same rights to ancestral property as the sons. Therefore, they were members but not coparcener.
A coparcener is a legal heir who has a claim on the ancestral property by virtue of birth and can demand the partition or division of the property to claim their share. Daughters were not considered coparceners and lost their merge rights as a member after marriage. However, the 2005 amendment introduced to the Hindu Succession Act of 1956 legally validated the rights of daughters as coparceners. The amendment also clarified that these rights were inalienable and could not be revoked when the daughter gets married. This means that a married daughter also has a claim over ancestral property.
No one individual can sell the ancestral property. Since the claim or right over the property extends to 4 generations, it cannot be sold by any one individual. The head of the HUF has the right to control, maintain, and manage the asset in its entirety. If the situation necessitates the sale of ancestral property, every stakeholder has to provide consent by signing legal documents and NOCs. The property cannot be sold unless the decision is unanimous and collective. Even if a single coparcener is unwilling, legal recourse can prevent the sale.
As mentioned above, an individual cannot sell the ancestral property. It cannot also be willed by an individual or gifted or otherwise given away since this contradicts subsequent generations' rights or other coparceners' rights. It is only on the demand of one or more coparceners that the ancestral property can be partitioned or divided. This should be done with an equal share going to each heir or coparcener. When a piece of ancestral land or property is divided and partitioned, the heir who receives his/her portion can now consider it self-acquired property. This can now be sold, gifted, or willed as per the owner's wishes.
Gaining your share of an ancestral property can make it a self-acquired property for you. If you wish to sell this, it is important to understand the capital gains and indexation implications. To take advantage of the exemption on Capital Gains Tax under Section 54, you can invest the gains in two residential properties. This must be done in the financial year preceding the sale of the original property or within two years of concluding the sale of the original property. Your Blox Relationship Manager will help you locate RERA-registered properties from verified developers to help reinvest capital gains and make use of the exemptions clause.
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