Tax Planning through WILL

	'Will' is one of the most important and material document of a person's wish to be carried out after his death. It is the only document, which in its totality comes into operation after the death of the testator. It is not only that a person may devise his moveable or immovable properties by means of a WILL but a person can also legally provide for other matters which are within his domain, just as a person governed under the Hindu Law can confer by means of a will a valid power to his widow to adopt a son to him. The person who makes the will is called the 'testator' . The persons who get the benefit or in whom the property is to be vested are called the'beneficiaries' or the 'legatees' .The subject matter of will is called the 'bequest' .
	The  will of Hindus are governed by the Hindu Law except wherever these are subjected to legislative enactments.
	Tax Benefits of Will:
	1.	'Will' can be made in favour of any person and therefore a beneficiary can be any person including a lady or a minor, and even a society, trust, company, association of persons or HUF. Thus, a testator can so plan and devise his bequest to ensure that it may attract the least amount of tax or no tax in the hands of beneficiaries or legatees.
	2.	If property is passed through will , no capital gain tax is attracted, as the transaction is not regarded as transfer under section 47(iii) of the Income Tax Act. Similarly, no gift tax is chargeable as per sec. 5(1)(x) of the Gift Tax Act.
	3.	Through a will the property can be passed on to the HUF of the sons of the testator, thus providing the sons a separate assessable entity for the purpose of Income Tax and Wealth Tax.
	4.	Property can be passed on to a trust created under the will for the benefit of the specified beneficiaries with ascertained shares and thus avail the tax benefit. A trust with unspecified shares of the beneficiaries can also be created by way of a will without attracting the maximum marginal rate of tax, provided the trust is the only trust declared by the testator through his will as per proviso (ii) tosection 164 (1). This trust can have income even under the head “Business or Profession” without attracting maximum marginal rate of tax, provided the beneficiaries to the trust are relatives and dependent on the testator for support and maintenance as per the second proviso to section 164 (1).
	5.	Other advantages of transferring the property through will are-
		a.	No stamp duty is payable irrespective of the value of the property. However, at the time of taking probate of the will, the probate fee is to be paid.
		b.	No registration is necessary. However it is advisable to get the probate or letter of administration, as the case may be, registered with the Registering Authority. Such registration does not attract stamp duty as also registration charges and will serve as a proof of transfer of property.
		c.	The Hindu Succession Act, 1956 has extended the right of inheritance to the daughters of the deceased in addition to the sons, which has materially altered and disturbed the basic structure of devolution under the Hindu law of inheritance. It may be noted that the daughters are not only entitled to the share in the properties , which were self acquired by the deceased father, but they are also entitled to claim a share in the property of HUF to limited extent, calculating the share in assets of HUF which the deceased father would have got, if there would have been a partition of the HUF during his life time. The daughters can claim in respect of such share. Therefore, if there is a HUF and the Karta desires to continue the same by his sons, without interference by the daughters, then it is advisable to make such provision in the will, so far his share in HUF property is concerned.
		d.	A proper will in respect of self acquired property as well as share in HUF properties helps in preserving the amity and good relations among the family members.
	MAIN CHARACTERISTICS OF A WILL:
	1.	It takes effect after the death of the testator.
	2.	The testator is vested with the absolute discretion not only to modify or alter but also to revoke his will altogether during his life time.
	3.	After the death of the testator, his last will is to prevail and no person is legally competent to interfere with it or to modify it in any mode or manner.
	4.	Every person, whether a male or female who is of the age of majority and has a sound mind is competent to make a will.
	5.	Every person, whether a male or female, can make a will with respect to all matters within his legal domain and in respect of all properties which are within his disposing capacities.
	6.	It can be drawn on any ordinary blank paper.
	7.	Attestation is necessary by two witnesses.
	8.	No stamp duty is payable.
	9.	Registration of will is optional.
	LIMITATIONS REGARDING WILL:
	1.	The right of a Hindu to make a will is subject to his making an adequate provision for the maintenance of his widow.
	2.	A Hindu cannot so dispose of his property as to free himself from the claim of maintenance by his wife.
	3.	A member of HUF cannot make a bequest of ancestral property under the Mitakshara School of Hindu Law, except the share of HUF property, which he would have got if partition of HUF would have taken place during his life time.
	4.	Under the Mohammedan Law, a 'Will' is not valid unless the legal heirs give their consent to it after the death of the testator - as pronounced by the Allahabad High Court (refer Current Civil Cases 1990)
	GIFT VIS-a-VIS WILL:
	Section 122 of Transfer of Property Act defines 'gift' as a transfer without consideration, by one person, called the donor, to another called the done, and accepted by or on behalf of donee. Such acceptance must be made during the life time of the donor and while he is still capable of giving. It thus follows that the acceptance by the done has to be made during the life time of the donor which implies that the donor and the donee must be living persons and a gift is to be completed within their life time and not after the death of either of them. Therefore, the property passed by means of a will is although without any consideration, yet it does not amount to a gift in the legal sense of the term.
	In the case of a will ,it comes into operation only after the death of the testator and the acceptance by the beneficiary is not essential, for the validity of a will. It is neither necessary nor required that the beneficiaries under the will should give their consent. In most of the cases ,even the bequest made under the will is not made known to the beneficiaries before the death of the testator. A gift of immovable properties is necessarily required to be, by a registered instrument, whereas in the case of will, registration is not at all required , whether the subject matter of the bequest is movable property or immovable property.