How to calculate stamp duty on the share of property my brother is gifting me?

My brother and I jointly purchased a property 10 years ago. My brother contributed 30% of the price while I contributed the rest. This can be evidenced only from the Money Receipt attached to the Registered Sale Deed but not mentioned explicitly in the Deed. Now my brother wants to Gift his share of the property to me (out of love and affection).  We want to ascertain the Stamp Duty payable on the Gift Deed. If the current market valuation of the property is ₹100 (for example), will the Stamp Duty be levied on ₹50 (equal share) or on ₹30 (share contributed by him at the time of purchase)?

—Name withheld on request

As per Indian Stamp Act, 1899 read with state-specific laws, most states prescribe stamp duty on a gift deed as  calculated based on the share being transferred as per the current market value, not the original contribution ratio — unless the shareholding is clearly recorded in the registered sale deed.

In your case, although your brother contributed 30% of the purchase price, the registered deed considers both of you as 50:50 co-owners, since there’s no explicit mention of contribution ratios. A money receipt, while helpful, is not conclusive evidence of ownership proportion in property law unless acknowledged in the title document itself.

So, if the current market value of the property is ₹100 and your brother is gifting “his share,” the stamp duty would typically be calculated on ₹50 (i.e. half the property’s current market value), not ₹30.

That said, stamp duty rates and exemptions vary by state. Some states offer concessional stamp duty for gifts between siblings or close relatives, and the definition of “relative” for this purpose may also differ. It’s advisable to consult the local Sub-Registrar and/ or a property lawyer to check if sibling-to-sibling gifts qualify for such concessions in your state.

For an individual who is in the higher tax bracket with little room for tax optimisation, would it be better to sell ESOPs via HUF where he is the karta or in individual capacity? Another related question is, can ESOPs once vested be transferred to an HUF?

—Name withheld on request

Under law, Hindu Undivided Family (HUF) is treated as a separate entity, distinct from its members (including Karta). The HUF has its own PAN, bank accounts, demat accounts and files its own tax returns. 

ESOPs are granted to an individual in their capacity as an employee, and are not usually transferable to the HUF, even after vesting. In most cases, the terms of the ESOP plan are likely to prohibit any such transfer. Even if technically permitted, shifting vested ESOPs to the HUF for tax planning may not work in substance. 

In short, ESOPs cannot be used for HUF-based tax planning. Routing such income through the HUF would likely be considered tax avoidance, and the income may still be clubbed back to the original holder under section 64(2) of the Income-tax Act, 1961.

CA Vijaykumar Puri, partner at VPRP & Co LLP, Chartered Accountants