Immovable Property Explained - Types, Legal Rights, and Key Distinctions

Table of Contents

• Introduction to Immovable Property
• Types of Property: Immovable vs. Movable
• Features of Immovable Property
• Types of Immovable Property
• Differences Between Immovable and Movable Property
• Legal Rights Associated with Immovable Property
• Additional Rights on Immovable Property
• Examples of Immovable Property
• Gift of Immovable Property: Rules and Tax Implications
• Frequently Asked Questions (FAQs)

Introduction to Immovable Property 

Immovable property encompasses land, buildings, and anything permanently attached to the earth that cannot be relocated. This guide provides a comprehensive look at types of immovable property, associated legal rights, and the differences between immovable and movable assets.

Types of Property: Immovable vs. Movable

Immovable property, also referred to as real estate, includes land, buildings, and other structures fixed to the earth. Movable property consists of items like jewelry, electronics, and money—assets that can be physically relocated.

Features of Immovable Property

Appreciation:

Immovable properties typically appreciate over time, making them a sound investment.

Legal Frameworks:

These assets are governed by specific legal frameworks, such as the Registration Act and Transfer of Property Act.

Permanence:

Immovable properties are fixed in one location, offering stability.

Utility:

They serve various purposes, including residential, commercial, or agricultural uses.

Durability:

Immovable properties are built to last and are generally more durable than movable assets.

Types of Immovable Property

Land: Defined as a portion of the earth’s surface, it includes subsurface rights and structures permanently affixed to it, such as buildings.

Benefits from Land:These are rights arising from land, including profit, rent, and dues.

Objects Attached to Earth:Items rooted or embedded in the earth, such as plants, trees, and buildings.

Differences Between Immovable and Movable Property

The differences between immovable and movable properties are as follows:

Legal Rights Associated with Immovable Property 

Right to Collect Rent: Owners may legally lease and collect rental income.

Right of Way: Grants legal access through specific paths or sections of land.

Right of Fishery: Exclusive rights to fish or harvest from water bodies on the property.

Easements and Licenses: Allow limited access or rights for others to use the property without ownership transfer.

Mortgages:  Properties can be leveraged as collateral for loans.

Additional Rights on Immovable Property

Easements:

Rights to access or use another’s property for specific needs.

Leases:

Temporary rights to use the property, generating income for the owner.

Licenses:

Permission for limited use, often for specific functions or activities.

Examples of Immovable Property 

Residential homes, commercial buildings, and permanently fixed installationsTrees, shrubs, and other rooted natural or fixed elementsStructures and machinery embedded permanently in the property

Gift of Immovable Property: Rules and Tax Implications

Gifting immovable property may be subject to taxes under the Income Tax Act, based on value and relationship with the recipient. Certain family-related transfers may receive exemptions, though professional legal advice is recommended to understand tax implications fully.

Frequently Asked Questions (FAQs)

Q: What appears to be immovable property but is not?

A: Growing crops, timber, and grass may look like immovable property but are classified as movable property.

Q: What is immovable property called in Hindi?

A: Immovable property is known as "Achal Sampatti" in Hindi.

Q: What is an annual immovable property return form?

A: Rule 18(1)(ii) of the CCS (Conduct) Rules, 1964 mandates that Group A and B government employees submit an annual return to the government detailing all their possessed immovable property.

Q: What is TDS on the sale of immovable property?

A: Purchasers of immovable property (excluding agricultural land) valued at Rs. 50 lakh or more must deduct tax at 1% from the payment to the seller, per Section 194-IA of the Income Tax Act.

Q: What is the purpose of applying for an NOC for an immovable property?

A: NOC (No Objection Certificate) ensures legal ownership when transferring property, a mandatory step in the property registration process.

Q: What is included under the category of immovable properties?

A: Immovable properties include land, hereditary allowances, buildings, fisheries, ferries, and benefits from the land. However, crops, grass, and timber are classified as movable.

Q: Do I need RBI permission to sell property in India?

A: RBI permission is required for property transactions in India by citizens of Bangladesh, Pakistan, China, Afghanistan, and Sri Lanka, including leasing properties in India.

Q: Is land considered immovable property?

A: Yes, land is classified as immovable property because it cannot be moved.

Q: Are growing crops considered immovable property?

A: No, growing crops are classified as movable property.

Q: Is grass considered immovable property?

A: No, grass is regarded as movable property.

Q: Are fruits considered immovable property?

A: No, fruits are classified as movable property.

Q: Is registration of immovable property in India required?

A: Yes, registration is mandatory under the Registration Act, 1908, if the property value exceeds Rs. 100. Registration supports legal claims in case of ownership disputes.

Q: Can immovable property be gifted?

A: Yes, immovable property can be gifted through a registered gift deed. Tax exemptions may apply for family-related transfers under the Income Tax Act; consult a legal expert for clarity on tax implications.

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