Why title change is important

Ensure that the records reflect the correct property ownership details

Property is an interesting asset — its ownership comes with not just income and gains but also obligations to pay taxes and other dues.

So, when you become a property owner — by buying, or by inheritance through a will or a gift deed — it is important to notify the government departments to modify the records to reflect the right ownership.

Mutation basics

Changing the name of the owner in the title document is called mutation. The main reason for doing this is to ensure the Revenue Department knows who is responsible for tax payments so they can charge property and other taxes to the right person.

During a sale, mutation is typically done immediately. But for a gift or inheritance, this step is often overlooked. The rule requires that when the person primarily liable for payment of taxes dies, the inheritor must apply for mutation within six months. There is a penalty if this is not done, but this is a very small amount and is often not considered a big issue, especially if taxes are paid on time.

There are, however, two situations when mutation becomes important. One, in the case of agricultural lands, the title will not pass to the new owner without mutation. This is important when there are payments from the government. For instance, if the land is acquired by the government, compensation will be paid to the person whose name is in the revenue records.

Two, in case of non-agriculture land, mutation is required to get government services such as electricity or water connection. Also, when you sell the property, the buyer would ask for the latest mutation record to ensure there are no issues in the title.

You must note that as a mutation transfers financial ownership, any outstanding loan against the property is also passed on to the new owner.

Mutation is done at the local government office that handles revenue, whereas you would register a property through the execution of a sale deed at the Sub-registrar’s office.

The documents required depend on the reason for the mutation. For instance, if the transfer is due to a sale, you need to submit a copy of the sale deed, the latest property tax receipts and ID proofs as required. You must also provide an indemnity bond on stamp paper containing an undertaking that they indemnify the Corporation (city or municipal) in the event of any dispute arising from the mutation made based on the application. An affidavit, on a stamp paper of requisite value, must also be provided, and this must be attested by a notary.

For mutation from inheritance, you need to provide a copy of the death certificate, the will or the succession certificate, in addition to the documents mentioned above. In the place of a sale deed, the receipt for registration of the property with a sub-registrar must be given. Similarly, when the mutation is through a gift, a copy of the registration of the gift deed must be submitted along with the affidavit and other documents.

The documentation procedure (whether it can be done online or by submitting a physical form) and the fees payable vary from State to State. For example, in Bihar, the forms are available online but must be submitted in person at the local office. Some municipal corporations may allow submitting the form at e-seva centres. Transfer charges vary from a small fixed amount of, say, ₹500, to 0.1-1.5 percentage of the property value. However, in West Bengal, there is no mutation fees for any inherited land property, including agricultural land. Once you submit all the required documents, the assessing officer (or) revenue inspector will check the documents and may also visit the property. The process to issue the certificate may take 45 days, if there is no contest. If there are any objections raised by anyone, it can take longer.

Special cases

Not just for property that is owned (also called freehold), you are required to do mutation even for leasehold properties. For freehold properties, mutation is done by the revenue authority, while for leasehold properties, it may be done by the local area Development Authority or the Land and Development Office.

In case of inheritance, if there are other siblings who do not get a share as per the will, you may be required to get a no-objection certificate from them when applying for mutation. And if there is no will, you need to obtain a succession certificate from the court to establish ownership. If the property is shared by many owners, you must attach a rough site plan showing different portions of the building and who will be occupying them.

If the owner is an NRI and cannot appear in person, they can give a Power of Attorney (PoA) to a local person. The PoA must be notarised by an attorney in the country of the NRI’s residence and must be attested at the nearest Indian consulate. This must be submitted with the mutation application documents.

The writer is an independent financial consultant

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