1. Its not clear whether your mother-in-law is the absolute owner of the property and the property is anestral or self-acquired. Ancestral means descended for the last four generations without any partition or settlement. There may be other heirs whose interest cannot be gifted unless mother-in-law is the absolute owner. Three Siblings presumed to beyour husband's brother/sisters, not his children.
2. Assuming the property is not ancestral but self-acquired, since your mother-in-law and husband are co-owners of the said flat, she may execute either a gift deed or a release deed to transfer her share to your husband.
3. The Maharashtra Government waived off stamp duty on transfer of immovable property by its owner to an heir or a family member. (March 2015). 1 % of Market Value or Rs.30,000/- which ever is less. Registration is Compulsory. For Will only Rs.100/.
4. Pros and Cons of Gift deed over Will
Pros
1. It is executed during the life time of donor and transfer happens immediately whereas “Will” is applicable after death.
2. Gift deed needs to be registered; only then it is effective. Registration renders it less liable to litigation. “Will” on the other hand is prone to litigation.
3. Transfer using gift deeds are tax free in the hands of donor and donee.
Cons
Gift deed is irrevocable post execution but “Will” can be changed as many times as you want.
5. Gifting process can be subdivided into three parts as described below:
1. Drafting the Gift Deed – A gift deed is drafted with the help of a lawyer and it describes what is being transferred and to whom. Gift Deed is a contract between donor and the donee which defines simultaneous and reciprocal act of giving and taking. A gift to be valid must be made by a person voluntarily and not under compulsion without any exchange of money.
2. Acceptance – Acceptance of the gift after its execution is a legal requirement and Donee must accept the gift during the lifetime of donor. In case donee fails to accept the gift, it is rendered invalid. The acceptance may be validated by acts such as taking possession of the property.
3. Registration – As per Section 123 of the Transfer of Property Act, a gift of immovable property cannot pass any title to the donee unless it is registered. Attestation by two witnesses is required during registration and post registration, title transfer is possible.
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