Transferring ownership of a residential flat to a child is an important estate-planning decision and can be done primarily through two legal routes — a gift deed or a will. While a gift deed is often preferred for its simplicity, it is not the only option, and each method carries distinct legal, tax and personal implications that families should carefully evaluate.

Gift Deed: Immediate and Seamless Transfer

A gift deed allows the owner to transfer the property during their lifetime. In the case of a father transferring a flat to his daughter, the transaction is tax-neutral at the time of transfer, as both qualify as “relatives” under the Income Tax Act.

Key advantages of a gift deed include:

• Immediate transfer of ownership, avoiding post-death paperwork

• Reduced risk of inheritance disputes

• Generally smoother acceptance by housing societies and authorities

However, gifting also has important considerations. Once executed, the ownership irrevocably shifts to the daughter, which means the original owner loses control over the asset. Therefore, it is crucial that the parent retains sufficient assets to ensure long-term financial security. Tax liability may arise later if the daughter decides to sell the property, as capital gains tax would then apply.

Will: Retaining Control Until Death

A will allows the owner to retain complete control over the property during their lifetime, with ownership transferring only after death. This option is often preferred when the owner has personal concerns or wishes to keep flexibility.

While a will avoids immediate transfer, it can involve:

• Procedural delays after death

• Possible disputes among heirs if the will is unclear or unregistered

That said, a well-drafted and registered will can significantly reduce these risks and make the transmission of property smoother for legal heirs.

Gift Deed vs Will: Which Is Better?

The choice depends largely on personal comfort, family dynamics and financial security.

• A gift deed is ideal when all parties agree and the owner is comfortable transferring ownership immediately.

• A will is more suitable if the owner wants to retain full control over the property for life or has concerns about future needs.

Some families also explore private family trusts for succession planning, but these are usually practical only for larger estates and not for a single residential flat.

The Takeaway

There is no one-size-fits-all solution. A gift deed offers speed and certainty, while a will provides control and flexibility. Before deciding, families should weigh legal clarity, tax outcomes and personal security to ensure a smooth and dispute-free transfer of property.

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