Basic rules relating to Transfer of Property


The Transfer of Property Act went into effect on July 1st, 1882. In line with the rules controlling its descent upon death, it regulates the laws regulating the transfer of property amongst persons who are still alive. It also completes the real estate section of the code of contract law. This Act does not engage with any other issues of property transfer; it solely deals with the transfer of moveable property between individuals.  


The Act only applies to property transfers made by persons acting on their own, including those made by sale, barter, gift, actionable claim, loan, and lease. The transfer of property by operation of law is not included. It deals with the exchange of real estate between individuals who are still alive. It only relates to free transfers made by agreement between the parties and excludes transfers made by the force of law (such as through succession, bankruptcy, confiscation, or sale in accordance with a court order). The Act somehow doesn’t deal with issues of asset inheritance or the disposition of property by will.

Rules Relating to Transfer of Property

There are various rules relating to the transfer of Property, which is discussed below:

  • The distinction between moveable and immovable property must be made. Under the terms of this Act, only immovable property and, in exceptional circumstances, moveable property may be legally transferred.

Section 3 of the Act defines what is meant by “immovable property.” A piece of property is said to be immovable if it doesn’t contain any standing trees, growing crops (i.e., vegetables with a distinct existence aside from their produce), or grass. As a result, the meaning of the word needs to be unique.

In Babu Lal v. Bhawani Das and Ors, the court determined that the Transfer of Property Act of 1882 can be used to interpret section 3(25) of the General Clauses Act, which specifies immovable property. According to the General Clauses Act, immovable property is whatever is indefinitely bolted to everything that is connected to the land, including land, opportunities derived from the land (such as the right to fish), stuff related to land (such as mature trees with no impartial use other than producing yield, like coconut palms and orange trees), and profits resulting from benefits arising from the land. 

The court also determined that immovable property includes rights of way, the capacity to acquire rent, a Hindu widow’s life stake in the revenue from her husband’s property, a business, furnishings, fittings, windows, doors, the position of a hereditary priesthood of the temples, etc.

The Transfer of Property Act of 1882 omits a definition for “movable property.” However, moveable property is often defined as a piece of property that may be transported from one location to another without causing environmental damage. Movable property is defined under the General Clauses Act as all types of property other than immovable property.

  • To protect the assets from potential conflicts and for their evidential value, several conditions must be met in order to transfer them legally. A legally binding document that is written, signed by the assignee, verified, and recorded must be used to transfer property. Where the law does not expressly require writing, a title transaction can be carried out without it. Under the Act, certain documents, including the sale of real estate with a value of at least 100 rupees, exchanges, gifts, and others, must be in writing even when they’re not recorded. The purchase of physical immovable property valued at 100 rupees or more, charges, gifts of immovable property, and others must all be in writing and recorded with the appropriate government.
  • Transfer of Property is defined under Section 5 of the Act. A living person transfers their property by doing one of the following: giving it to one or more other living people, themselves, or both themselves and other living people in the present or in the future. The term “person” does not just refer to human beings; it may also refer to a business, an organization of people, or a group of people. Consequently, a conveyance act by live individuals is required for a transfer to be legitimate. A partial or full interest in a piece of real estate may be transferred.

Prethi Singh v. Ganesh, a property placed far outside India to which the Act does not apply is included in the transfer of property. The Act’s provisions shall govern the parties’ rights and obligations in this situation. The location of the property outside of Indian territory is irrelevant.

  • The Act acknowledges a wide variety of property transactions. A sale is the exchange of title of a piece of property for money that has been paid in full or in part, pledged, or sold. The process is known as an interchange when two individuals transfer possession of one thing for possession of another thing, whether one thing or both things are totally constituted of money. The voluntarily and unpaid transfer of particular existing mobile or immovable property from one individual to the other that is approved by the donee is known as a gift. This is the third form of transfer. Such acceptance must be communicated in the donor’s lifespan, while he is still conscious and able to provide.
  • As per the Section 6 of the Act, there are 13 different types of properties that cannot be transferred.
  • How far a future property transfer is legal is defined in Section 5 of the Act. A live person transfers their property by doing one of the following: giving it to one or more other living people, themselves, or both themselves and other living people in the present or in the future. The transfer of property excludes the transfer of unrealized future gains. Therefore, in India, a sale of future ownership is less legitimate. However, a conveyance of such property may be legal as an assignment contract before the property is created, equity is attached to the ownership, and the assignment contract is fully fulfilled.


Rules relating to transfer of property

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