Last Updated on August 11, 2022 by Satish Mishra
Legally No since a minor cannot enter into contract under provisions of Transfer of Property Act, 1882 but yes he/she can receive properties as a gift and later on attaining majority can claim enjoy his/her right over the property. As per Indian laws, minor is not a legal person, so any contract dealing with minor is said to be void.
Remember, there is no such law in India that prevents minor from owning a property in Zirakpur Mohali Derabassi Kharar Chandigarh Mohali Panchkula (Punjab and Haryana in Particular) but the title of property remains conditional until the minor becomes Major. On majority, the full ownership rights vest with minor regarding the property to manage, sell or hold as per law.
A very popular legal website Mondaq quotes in their blog- However, if the sale is vitiated by any of the ingredients that can vitiate any contract then a bonafide claim may be made by the person challenging the sale. This is very important for any person dealing with the property of Minor involved.
Registration of Minor’s Property– But Registration Act, 1908 says any transfer of property has to be registered. So a gift has to be accepted by minor donee through close guardian so that valid exchange of property takes place as per law.
Very rarely it is seen minor repudiating the gift but yes on attaining majority he/she can repudiate it.
Gift received from blood relations to minor are fully tax free. Minor can also buy property from his own funds but that has to be only through the guardian and not of his/her own.
Can Minor Sell Property on his/her Name– No. Not without the court permission and that through Guardian only in his/her best interest only. As per Hindu Minority and Guardianship Act, 1956 one has to make application before the court. Even for leasing out the property of Minor, a permission has to be taken.
As per clause (a) of subsection (2) of Section 8 of the Hindu Minority and Guardianship Act, no immovable property of the minor can be mortgaged or charged or transferred by sale, gift, exchange or otherwise(by the guardian) without the previous permission of the Court as quoted by Kaanoon.com.
Tax Implications– Section 10(32) of the Income Tax Act exempts Rs 1500 per year for minor. More than it, would be added to the income of parent. Accordingly, the assessment would be done. A minor can have maximum two homes on his name to avoid tax implications, not more than that.
Why do then People Purchase in the name of Minors– Possibly out of their love and affection and mostly it is the Grandparents who foresee a secure future for their kids financially do so.
Minor’s Property in Divorce Settlement– Many couples today have started making this arrangement which is also well accepted by the court, that is buying properties in minor’s name out of Alimony and maintenance amount as per settlement between husband-wife in a divorce case. But note there will be no rebate in stamp duty in case you are thinking being a minor, he/she will get the benefit. No they won’t. But on the registration document, the minor will be represented by you as a natural guardian. This may work for even an unborn child.
You must read a very well written post by Economictimes (Indiatimes.com) post on Inheritance and legal estate rights of five categories of children that covers succession in case of Kids, minor children, children of divorcees, adopted children, children of live-in couples and Illegitimate children.
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