Impact Of the Uniform Civil Code (UCC) on Property Inheritance & Taxation
The Uniform Civil Code (UCC) is currently up for discussion in India. A Uniform Civil Code, or UCC, is being introduce in order to bring uniform regulations regarding property inheritance, marriage, divorce, and adoption, among other things.
In India, where there are many different religions, each one coexists with its own set of inherited and religious rules. However, the existence of distinct inheritance laws as prescribed by several religions frequently causes disputes and misunderstanding. The Uniform Civil Code (UCC) is being pushed by the Indian government in order to bring about uniformity in matters of succession & property inheritance.
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What is the Indian Uniform Civil Code?
A body of common laws and rules governing adoption, marriage, divorce, and property inheritance is known as the Uniform Civil Code, or UCC. The goal of the Uniform Civil Code is to make civil laws more consistent. The code will be applicable to all faiths and ethnic groups if it is put into practice.
The Uniform Civil Code will technically repeal the following laws once it is implemented:
- 1955 Hindu Marriage Act
- 1956 Hindu Succession Act
- Application of Muslim Personal Law Act of 1937
How Do Personal Laws in India Regulate Property Inheritance?
The Uniform Civil Code seeks to replace the personal laws followed by India’s various religions with common rules. Following are a few examples of personal laws that are followed in India:
Hindu Personal Law: Hindu personal law is derived from ancient traditions and texts. The Hindu Succession Act regulates issues relating to property inheritance, while the Hindu Marriage Act of 1955 regulates factors related to marriage.
Hindu women have been granted equal inheritance rights on their parents’ property by the Hindu Succession Act of 1956. Hindu women have an equal right to inherit their parents’ assets. This law also governs the property rights of the Buddhist, Sikh, and Jain groups.
Muslims in India abide by Muslim Personal Law in regards to marriage, property inheritance, and divorce. Shariah is the foundation of Muslim personal law. The Muslim Personal Law’s guiding principles apply to property inheritance.
Law for Parsis, Jews, and Christians: The Indian Succession Act of 1925 is applicable to Parsis, Jews, and Christians. For instance, based on the number of children and relatives, Christian Women are given a predetermine share. The same is true for Parsi widows and their children. If the deceased person’s parents are still alive, they receive a share of the children.
How would UCC affect Hindu Undivided Families’ (HuFs’) tax expenditures?
The Hindu Undivided Families (HUFs)’ inheritance laws and taxation structure are anticipate to change once the Uniform Civil Code is put into effect in India. Given that other religions do not embrace similar ideas, it is highly probable to occur. The HUFs currently receive the following benefits, but they may stop once the Uniform Civil Code, or UCC, is implemented:
The family’s assets are managed by the Karta, or head of the family, under the HUF. As a result, it has been acknowledged for tax purposes as a distinct entity. HUF also has a PAN card, similar to how people do. A HUF may invest in mutual funds and shares and do business under its own name. A HUF is eligible for a tax exemption of Rs. 2.5 lakh, which is different from the income of the individual family members, if tax exemptions are discussed. By 2022, the HUF will also be able to register a PPF account.
Additionally, a HUF may deduct taxes from the sum that its members have deposited in their PPF accounts. HUF is entitle to further reimbursements for the cost of its health insurance premium.
Tax expenditures
Additionally, if a person owns multiple properties. They can only claim tax exemption on one of them. And the others are consider to be rent out. The notional rent is use to compute the tax. HUFs, however, are exempt from paying taxes on the additional homes they own. The HUFs are also eligible for home loans and can make reimbursement claims for the loan amount.
Thousands of families and millions of Indian residents fall under the HUF concept; thus, it is unclear whether the government would do away with this idea under the UCC, also known as the Uniform Civil Code. There will also be logistical effects if the UCC is implements and the HUF idea is change. The current loan, insurance, and bank account arrangements will need to be modifies.
Hindu Property Inheritance Structure Affected by UCC
The Uniform Civil Code’s (UCC) implementation will have an effect on every religion’s system of property inheritance. If we discuss the Hindu succession system, the term “coparcenary” enters the conversation. According to this idea, the wife and children have a natural right to inherit the property. Simply said, if a man passes away, his wife, children, and any widowed mothers (if any) will all receive an equal share of his inherited or acquired property.
Only sons were thought to be entitle to the estate until 2005. Daughters now have the right to inherit ancestors’ property as a result of the ruling. The court rule that daughters have the same right to inherit as males and that this right cannot be taken away from them.
This framework could be amend in numerous ways if the Uniform Civil Code, or UCC, is implement. It will be extremely difficult to harmonies the inheritance laws of various religions, nevertheless. Hindu succession laws have been change in this situation to ensure gender equality. The amendment opened the door for equal rights regarding property inheritance, although other religions have not yet advanced in this area.
Laws governing property inheritance in various religions
When it comes to Islam, the inheritance laws are not well codified. There are a number of ways to deny the wife, kids, & other family members their legitimate property rights. Additionally, Islamic law does not recognize the concept of a joint family. The codification of Muslim laws has been advised by law commissions & expert groups on numerous occasions to ensure that spouses, widows, and children are not deprived of their legitimate rights.
Christian law applies similar principles to Hindu law. It also states, “Except they are govern by customary law,” though. In addition, the Portuguese Civil Code of 1867 governs Christians in Daman, Diu, and Goa. Conversely, the French Civil Code of 1804 and the customary Hindu law of 1925 regulate Pondicherry’s Christians. To standardize and streamline the laws governing property succession, the proportion of daughters & wives who inherit property must be codified.
When it comes to property inheritance, the Indian Succession Act is applicable to Parsi households, although with several discriminatory rules. For instance, Parsis are assigned to children born to a Parsi father & a non-Parsi mother. Children born to a Parsi mother & a Non-Parsi father, however, are not recognized as being Parsis. If a Parsi mother marries someone from outside the Parsi community, she no longer belongs to the Parsi community. These marriages also deprive the offspring of their property rights.
In addition, there are numerous gaps and irregularities in the property inheritance rules in Hindi, despite numerous modifications to the succession laws.
An overview of the Uniform Civil Code
In conclusion, both diversity & complexity have resulted from the diversity of India & the simultaneous practice of numerous religions. There has been discussion about the Uniform Civil Code for a very long time. It is still difficult to get all parties on the same page for the execution of an agreed-upon Uniform Civil Code, or UCC, because of the role played by religious practises and the sentimental values associated with the customs.
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