Division of property held jointly by co-owners is known as partition. When a property is divided each member becomes sole owner of his/her portion of the property. Each divided property gets a new title and each sharer gives up his/her interest in the estate in favor of other sharers.
The instrument of partition is a document by which the co-owners of a property agree to divide a property among themselves by oral agreement or written agreement or by arbitration or through court. If a document of release shows that the executants are to get cash or other assets the document is an instrument of partition. The basis of partition is equality. The party shall share the property equally.
Partition deed requires stamp on the value of largest separated share. Duplicate copies are stamped under Article 25 of Indian Stamp Act. Each duplicate copy must denote the value of the stamp on the original. Unregistered deed of partition is not admissible as evidence to prove the fact of partition. Thus, one cannot prove his/her title on his/her share without registering it.
Palu Patti is also a very common practice of oral transfer of property but very few people know that a Palu Patti should be deduced in writing which further aggravates the problem. oral partition is allowed under Hindu Law, it is not preferable as it may give rise to disputes particularly with respect to immovable properties. It is advisable oral partition should be reduced in writing (palu patti). Also, the Income Tax Act does not recognise oral partition of a Hindu Family property unless the Income Tax Officer is satisfied with the facts and this is possible only when it is recorded in partition deed.