You Paid 80%. Your Spouse Paid 20%. The Law Says 50-50.

You buy a ₹1 crore flat with your spouse. You put in ₹80 lakh from your savings. Your spouse puts in ₹20 lakh from hers. Both names go on the sale deed. Nobody specifies who owns what percentage.

Ten years later, something happens. A sale. A separation. A death in the family. Somebody asks: what was each person’s share of the flat?

The answer most couples expect is “80-20, obviously.” The answer the law gives is very different. Under Section 45 of the Transfer of Property Act, 1882, if your deed doesn’t specify shares and you can’t prove your contribution, the law presumes you each own half.

That ₹30 lakh gap between what you paid and what the law credits you with isn’t a theoretical problem. It becomes real the moment somebody has to divide the asset.

What Section 45 Actually Says

Section 45 of the Transfer of Property Act, 1882 deals with immovable property bought jointly. The section works in a specific order, and understanding that order is the whole game.

First, if two or more people buy a property together using a common fund (say, a joint bank account both spouses topped up), their shares in the property match their shares in that fund. If you contributed 60% of the joint pool and your sibling contributed 40%, your property shares mirror that.

Second, if the buyers use separate funds to pay the seller, each person’s share in the property is proportional to the consideration they advanced. Your ₹80 lakh and your spouse’s ₹20 lakh from different accounts would produce an 80-20 ownership split.

Third, and this is where most Indian buyers get stuck: in the absence of evidence as to the interests in the fund, or as to the shares each person advanced, such persons shall be presumed to be equally interested in the property. No evidence means 50-50. Or 33-33-33. Or 25-25-25-25. Equal, regardless of who actually paid.

The cascade is clear: try proportional first, fall back to equal only when the paper trail is missing.

The ₹1 Crore Flat: A Worked Example

Rohit and Priya buy a flat in Pune. Sale price: ₹1 crore. Rohit pays ₹80 lakh from his salary savings accumulated over eight years. Priya pays ₹20 lakh from a gift her father gave her when she got married. Both names go on the registered sale deed. The deed says “Rohit and Priya, joint owners.” No percentages. No mention of who paid what.

Scenario A, the deed spelled it out: “Rohit holds 80% undivided share, Priya holds 20% undivided share.” Clean. No ambiguity. Any future event (sale, dispute, death) uses those numbers.

Scenario B, the deed is silent, which is what actually happened: both names, no percentages. Ten years later, Rohit dies. His Class I legal heirs under the Hindu Succession Act are Priya (wife), their two children, and Rohit’s mother. They have to divide Rohit’s share of the flat.

The first question: what is Rohit’s share? Priya says 80% because Rohit paid 80%. Rohit’s mother’s lawyer says prove it. Without bank statements, cheques, a gift deed for Priya’s ₹20 lakh, or any written record of who advanced what, the court has no evidence to work with. Section 45 kicks in. The presumption is 50-50.

Rohit’s estate is now treated as 50% of the flat, not 80%. That 30% difference, worth ₹30 lakh at original price and considerably more at today’s market value, shifts from Rohit’s side of the ledger to Priya’s. Rohit’s mother’s 1/4 share of Rohit’s estate drops from 20% of the flat to 12.5%. A real number, lost to a paperwork gap.

When the Rule Actually Bites

Most co-owners never think about this because the rule only matters when somebody has to divide the asset. That happens in four situations, and every Indian family hits at least one eventually.

On death. The deceased’s heirs have to claim the deceased’s share, not the whole property. The size of “the deceased’s share” depends on whether the deed specified it. If it didn’t, the pot to divide among heirs is the S.45 presumptive share, usually smaller than what the deceased actually paid.

On divorce or separation. Couples fighting over property routinely discover that the person who paid more can’t automatically claim more. Contribution receipts, bank transfers, loan EMI records are the only way to rebut the equal-share presumption. Couples who kept casual mental accounts (“I paid the down payment, you paid the EMIs”) find that mental accounting doesn’t count in court.

On sale. Every co-owner must sign the sale deed and must receive their share of the proceeds. Banks and buyers ask: what is each seller’s share? If the deed is silent, the default answer is equal. The co-owner who paid 80% cannot demand 80% of the proceeds without producing proof.

On loan or mortgage. Banks lending against a co-owned property ask how much each owner’s share secures. Lenders want clarity. If the deed doesn’t give it, the loan amount available may drop to what a 50-50 split supports.

How to Rebut the Presumption

The Section 45 presumption is rebuttable. The Madras High Court made this clear in R. Ramanathan v. M. Arunkumar: if the parties cannot adduce clinching evidence of unequal contribution, the court has no choice but to treat them as equally entitled. Translated, this means evidence wins. No evidence, equal shares.

What counts as clinching evidence? Bank statements showing the outflow, cheques issued in favour of the builder or seller, demand drafts, wire transfers, home loan sanction letters specifying which borrower serviced which tranche, receipts from the seller acknowledging payment from named accounts. A gift deed if one spouse’s contribution came from a parent. A written declaration of sources of funds filed at the time of purchase.

What does not count: verbal agreements, WhatsApp messages about “who paid what,” or family understandings. Indian courts need documents. The contribution trail has to survive for decades, often after the original buyer is no longer around to testify.

Keeping receipts is half the work. Keeping them somewhere your family can actually find them is the other half. A bank statement from 2015, locked in an old email that nobody else has access to, is no better than no receipt at all.

The Cheapest Fix: Specify Shares in the Deed

The single most useful thing you can do when buying a co-owned property is insist that the sale deed, or a separate co-ownership deed, specifies the exact percentages each owner holds. “Rohit 80%, Priya 20%.” It takes one sentence. It costs nothing extra at the time of registration. It eliminates Section 45 from your life.

If your property deed is already silent and you regret it, there are three options.

First, execute a registered co-ownership deed now, while both parties agree. This is a supplementary document stating the agreed shares. It carries evidentiary weight and costs stamp duty plus registration fee (typically 1% to 5% of property value, varies by state).

Second, maintain a contribution file containing every piece of paper tied to the purchase: sale deed, agreement to sell, payment receipts, bank statements, loan documents, cheque counterfoils, builder acknowledgments. Keep it accessible to the family, not just the principal earner.

Third, reference the contribution in your registered will. If you write “of the Pune flat jointly held with my spouse, my share is 80%, and I bequeath that 80% as follows,” you are both recording your share and directing its disposal. A will alone will not override S.45 if the share itself is disputed, but it strengthens the case and signals intent.

If a Co-Owner Dies

Death is where the Section 45 presumption does the most damage, because the person who knew the contribution history is no longer there to prove it.

The surviving co-owner has to initiate property mutation to update the revenue records. If the deceased’s Class I heirs disagree about the share, the mutation officer cannot decide; it becomes a civil dispute.

Two common traps surface here. First, families assume that because the surviving spouse’s name is on the deed, they automatically “get” the whole flat. This is only true for joint tenancy with explicit right of survivorship, which is rare in Indian residential practice. Most Indian co-ownership is tenancy in common, where the deceased’s share passes to legal heirs, not to the surviving co-owner. Second, families confuse nomination with ownership. A nominee on bank records or a society share certificate is a custodian, not an owner.

Both traps are solved by the same thing: document the contribution, specify the share in the deed, write a registered will that names the asset and the intended beneficiary.

Six Common Mistakes Indian Co-Owners Make

These come up repeatedly in property disputes. If any of them describe your situation, fix them before the matter becomes urgent.

1. Assuming joint ownership protects the surviving spouse. It does not, unless the deed specifies right of survivorship and the instrument qualifies as joint tenancy. Default Indian deeds do not.
2. Relying on nomination alone. A nominee holds on behalf of legal heirs. Nomination without a will means the heirs decide, not the nominee. See our post on nominee versus legal heir rights.
3. Skipping the registered will. An unregistered will is legally valid but harder to prove. A registered will with two witnesses is the strongest civil document you can leave behind.
4. NRIs buying in a relative’s name without paperwork. The Benami Transactions (Prohibition) Act, 1988, as amended in 2016, allows an individual to hold property in the name of spouse or child from known sources of income, and jointly with siblings or lineal ascendants and descendants in similar conditions. Outside those exceptions, unrecorded “benami” arrangements risk the property being confiscated. Always execute a written agreement. For specific NRI scenarios, read our guide on NRI property inheritance.
5. Delaying mutation after a death. The longer you wait, the harder it gets to clear title. State timelines run from 15 to 90 days. Start immediately.
6. Not reviewing home loan insurance. If you co-own with a spouse and the home loan has a single-life cover, the surviving co-owner may still be on the hook for the EMIs. Read our guide on what happens to home loans after one borrower dies.

What to Do This Week

You do not need to fix a 20-year-old deed overnight. You do need to stop the gap from growing.

• Pull out your sale deed today. Read the ownership clause. If it does not specify percentages, note it.
• If you have a joint home loan, pull the sanction letter. Note the primary and co-borrower split, and who has been servicing EMIs.
• Make a one-page contribution log: source of funds, amount, date, bank account used. Attach scans of cheques, statements, and receipts.
• Store the log somewhere your spouse and one trusted family member can access.
• If you have not made a registered will yet, book a stamp paper appointment this month. Cost: ₹500 to ₹1,000 in most states.
• If you and your spouse want to formalise unequal shares in an existing property, consult a property lawyer about a registered co-ownership deed.

The cheapest point to fix Section 45 is before anything happens. The most expensive point is after.

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Disclaimer: This article is for informational and educational purposes only. It does not constitute legal, financial, or tax advice. The Transfer of Property Act, 1882 and the Benami Transactions (Prohibition) Act, 1988 are subject to judicial interpretation, and state-level stamp duty and registration rules vary. Consult a qualified property lawyer for advice specific to your situation. Anshin is not a financial advisory service.