- Date : 23/08/2023
- Read: 3 mins
How to ensure your nominee’s money goes to the right people? This article explains the steps and rules for transferring money to legal heirs and the tax implications involved.
Are you looking for a hassle-free way to transfer money from nominee to legal heirs? This article explains the steps involved in money transfer from nominee to legal heirs and the legal and tax implications of this process. You’ll learn how to avoid common pitfalls and make the process smooth and easy. Let’s understand the process and the tax implications when nominee and legal heir are not the same.
Highlights:
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Probate order required for money transfer from nominee to legal heirs.
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Zero tax if assets transferred without modification.
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Ancestral agricultural land is exempt from capital gains tax.
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Granddaughters in HUF have inheritance rights.
Also Read: Deciding nominee for your life insurance?
Nomination is a legal provision for custodianship of assets until legal heirs are established by will or succession act. Nominees are not owners of assets and there is no tax on inheritance. However, legal heirs should be nominees for fixed deposits and mutual funds to avoid capital gains tax. Having a will can ensure a smooth transfer of assets.
How to transfer money from nominee to legal heirs? Tax implications explained.
The nominee can give holdings to the legal heirs based on the succession certificate or probate order. This can be done offline in case of dematerialised assets or through an application to the respective companies. If the assets are transferred without any modification, there will be no tax implications. If the nominee has already sold the assets, they will need to pay capital gains tax on the profits. They will then need to transfer the remaining money to the legal heirs in the correct proportions.
How should the proceeds of the sale of ancestral agricultural land be distributed among the heirs (including the mother of legal heir)?
The sale of agricultural land in areas specified under Section 2(14) of the Income Tax Act 1961 is not subject to capital gain tax. In the case of ancestral property, everyone should be made a part of the sale agreement and the proceeds shall be distributed accordingly. The mother does not have a right to the ancestral property but can take gifts from the sale proceeds. Gifts to relatives are not subject to tax, so no tax shall be levied on anyone. The proceeds can be shared equally desired by all.
Inheritance Rights of Granddaughters in Hindu Undivided Families (HUF)
A granddaughter is a part of her grandfather's Hindu Undivided Family (HUF), but she is not a coparcener. This means that she does not have any direct rights to the property of the HUF. However, she does have the right to inherit your share in your father's HUF property.
Also Read: Why should legal heirs file returns for the deceased person?
Click here for the latest articles on Tax-planning
Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.
Are you looking for a hassle-free way to transfer money from nominee to legal heirs? This article explains the steps involved in money transfer from nominee to legal heirs and the legal and tax implications of this process. You’ll learn how to avoid common pitfalls and make the process smooth and easy. Let’s understand the process and the tax implications when nominee and legal heir are not the same.
Highlights:
-
Probate order required for money transfer from nominee to legal heirs.
-
Zero tax if assets transferred without modification.
-
Ancestral agricultural land is exempt from capital gains tax.
-
Granddaughters in HUF have inheritance rights.
Also Read: Deciding nominee for your life insurance?
Nomination is a legal provision for custodianship of assets until legal heirs are established by will or succession act. Nominees are not owners of assets and there is no tax on inheritance. However, legal heirs should be nominees for fixed deposits and mutual funds to avoid capital gains tax. Having a will can ensure a smooth transfer of assets.
How to transfer money from nominee to legal heirs? Tax implications explained.
The nominee can give holdings to the legal heirs based on the succession certificate or probate order. This can be done offline in case of dematerialised assets or through an application to the respective companies. If the assets are transferred without any modification, there will be no tax implications. If the nominee has already sold the assets, they will need to pay capital gains tax on the profits. They will then need to transfer the remaining money to the legal heirs in the correct proportions.
How should the proceeds of the sale of ancestral agricultural land be distributed among the heirs (including the mother of legal heir)?
The sale of agricultural land in areas specified under Section 2(14) of the Income Tax Act 1961 is not subject to capital gain tax. In the case of ancestral property, everyone should be made a part of the sale agreement and the proceeds shall be distributed accordingly. The mother does not have a right to the ancestral property but can take gifts from the sale proceeds. Gifts to relatives are not subject to tax, so no tax shall be levied on anyone. The proceeds can be shared equally desired by all.
Inheritance Rights of Granddaughters in Hindu Undivided Families (HUF)
A granddaughter is a part of her grandfather's Hindu Undivided Family (HUF), but she is not a coparcener. This means that she does not have any direct rights to the property of the HUF. However, she does have the right to inherit your share in your father's HUF property.
Also Read: Why should legal heirs file returns for the deceased person?
Click here for the latest articles on Tax-planning
Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.
