Movable and Immovable Property: Understanding Legal Distinctions

Movable and immovable property ownership carries profound significance, evoking honour and belonging. Registering property in one’s name fulfils a dream. Property encompasses items or places under legal ownership, ranging from sizable and immovable real estate like apartments to compact and movable possessions like iPhones. Notably, size doesn’t strictly dictate movability. Indian legislation stipulates that ownership determines the fundamental classification of property as either movable or immovable.

Property is defined under Clause (36) of Section 3 of the General Clauses Act, 1897 and clause (9) of Section 2 of the Registration Act, 1908. Our legislation classifies the term ‘property’ under various categories like tangible and intangible, real and personal, corporeal and incorporeal, and movable and immovable property. 

Both movable and immovable properties are guided by different laws and carry equal importance as our rights or duties related to them, based on their lawful distinctions. To find out the legal rights and duties, and the laws for an inheritance, one must classify the respective property in any one of the above-mentioned categories.

Misunderstanding and confusing these terms with each other can often lead to issues while selling or even litigation. Contracts, laws, valuation, and other legal aspects differ for each kind of property. In cases of confusion, you must contact a legal expert to avoid a court case that could turn ugly and cost you money along with your time. 

What is Movable Property?

Anything that is not affixed to the land can fall under the category of movable property, irrespective of its shape, size, quality, or quantity. Items classified under this category are subject to sales tax, central sales tax, certain restrictions and conditions under the General Sales Tax Act of the concerned state, and the Central Sales Tax Act, 1956. However, there is no need to register the movable property under the Indian Registration Act, 1908. Movable properties are either consumable or non-consumable and are not subjected to accretion to an inherited impartible estate 
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Section 2 (9) of the Registration Act, 1908 states that “Movable property includes standing timber, crops and grass, fruits on trees and juice in its trunk, roots and leaf, and property of every other description, except immovable property.” 

Whereas Section 3 (36) of the General clauses Act states that “Movable property shall mean the property of every description, except immovable property.” 

Section 22 of the Indian Penal Code 1860 states that “The words “movable property” are meant to include corporeal property under all descriptions, with exceptions such as land and things attached to the earth or permanently fastened to anything which is attached to the earth.

Movable Property Examples

Movable assets examples are everything that can be transported from one place to another, including:

• Vehicles, electronic devices, jewellery, books, timber, etc.
• Mango trees once cut and sold for timber purposes are also classified under the movable property section
• Growing crops and grass
• Royalty
• A decree for the amount of rent money owed
• Promissory notes issued by government offices
• Any machinery equipment that is not attached to the earth
• Stock shares
• Scientifically controlled forces of nature

What is Immovable Property?

As the nomenclature suggests, immovable property definition states that it is any property with rights of ownership attached to it and that cannot be moved. If the immovable property has to undergo an ownership transfer process, it is mandatory to register it under the Indian Registration Act, 1908 and must be subjected to its value if it exceeds the amount of Rs 100. The meaning of the Immovable property as per the Indian Regulation Act included everything from buildings, lands, rights of ways, and fisheries to hereditary allowances, and more. Essentially these will be assets that are permanently attached to the ground and cannot be moved.
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Section 3 (26) of the General Clause Act, 1847 states immovable property as “Immovable property will include land, advantages to come out of the land, and objects attached to the earth, or permanently fastened to anything attached to the earth”.

Section 2 (6) of The Registration Act, 1908 states that “Immovable Property includes land, building, inherited allowances, rights to ways, lights, ferries, fisheries or any other advantages to arise out of the land, and things attached to the earth or permanently fastened to anything which is attached to the earth but not standing timber, growing crops or grass.” 

Things attached to the earth can be classified under the following categories according to section 3 of the Transfer of the Property Act- 

a. Things rooted in the earth – This category includes trees and bushes, but standing timber, growing crops or grasses are exceptions. However, if the tree is used for nourishment or shade, it will act as immovable property and if it is used for commercial purposes like cutting wood, it will act as movable property.

b. Things embedded in the earth – Houses, buildings, factories, any natural water bodies that fall on the marked real estate are all examples of things embedded in the earth. However, a ship anchor cannot be considered as an immovable property as it is embedded in the mud for a temporary duration.
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c. Things that are attached to the things embedded in the earth – Permanent items that are installed for beneficial purposes can fall under this category. These items do not detach easily and will often result in some kind of damage or deterioration to the material. For example – a door or window is installed in a building. However, a tube light, fan, bookshelf, or wall clock won’t count as immovable property as they can be taken off anytime.

d. Chattel attached to Earth or building – Things that are attached to houses or buildings, but are movable can be counted in this category. For example – furniture. Strength, degree, extent, and manner of attachment will be the determining factors for the classification of chattel as movable or immovable property.

Section 269UA(d) of the Income Tax Act, 1961, states that immovable property can be defined as- 

(i) Any land or any building or section of a building, including, where any land or any building or part of a building is to be transferred together with any machine equipment, plant, furniture, fittings or other things, such as machinery, plant, furniture, fittings or other things. 
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(ii) Any rights that are associated with any land, building, or a section of a building (whether or not inclusive of any machine equipment, plant, furniture, fittings, or some other items therein) which is already constructed or will be constructed in future, being collected or ensued from any transaction (whether by the method of becoming a member of, or collecting shares in, a co-operative society, company or other groups of persons or by way of any agreement or any arrangement of whatever nature), not being a transaction by the method of a sale, exchange or lease of such land, building or section of a building.

Types of Immovable Properties

The following paragraphs address the several categories of immovable property that are common in the real estate context:

1. Land

Land can be described as a specific area of the earth’s surface that is susceptible to being submerged in water, a column of the surface above the surface, or the ground itself. The term “land” refers to all of these naturally occurring objects that are on or even below the surface of the earth.

Additionally, immovable property refersto all items that are erected or buried by humans with the goal of annexing a space permanently, such as walls, buildings, fences, etc.

2. Things rooted to the ground

The term “connected to earth” is broadly defined under Section 3 of the Transfer of Property Act to include: Things that are rooted in the earth, including shrubs and trees, with the exception of standing wood, grasses, and crops. Depending on the situation, trees and bushes may be considered moveable or immovable.

A tree is seen to be immovable property if the purpose is that it should continue to provide additional nourishment or sustenance, including its fruits. However, if the goal is to remove them after using the wood for a building or other industrial use, they will be considered to be timber and will therefore be movable property.

Buildings, homes, and other structures are examples of items that are entrenched in the earth. It depends on the circumstances as to whether certain objects are considered immovable or moveable, such as an implanted anchor in the ground used to hold a ship.

Items attached to what is so embedded:  Permanent and immovable possessions also include the long-term enjoyment of items linked to the land, such as windows and doors. While electric fans and window coverings are considered moveable property.

3.  Advantages that result from the land

Every advantage derived from land, regardless of how it manifests physically, is viewed as immovable property. The benefits of movable property, hereditary allowances, fisheries, and ferries are also covered by the Registration Act. Similar to the above, the right to collect rent and profits from immovable property, as well as the right to collect fees from a market on a specific plot of land, are also regarded as immovable property.

Rights Affiliated with Immovable Property

• Right to collect rent – For all the immovable properties owned by a person, he/ she is liable to collect rent after giving it on lease to a third party.
• Right to collect dues – If the third party leasing the property is cultivating on it or earning any kind of money through it, the owner of the immovable property is legally allowed to collect the dues.
• Right of way – Lands can be classified under public or private categories and trespassing them can lead to litigation.
• Right of fishery or factory – If the immovable property includes a factory or a water body that acts as a fishing spot, the owner can reserve rights to those benefits.

Immovable Property Examples

• Houses, Land, Trees attached to the ground
• Factory Buildings
• Contract for cutting bamboos for a specified amount of time
• Machinery, receptacles intended for commercial work
• Statues, paintings, or other decorative paintings can be classified as immovable if they are installed with the intention of permanent attachment to the tenement
• Fertiliser utilised on a farm or a garden
• Mines, quarries, or slag dumps
• Government contracts for public work, servitudes, or other legal rights over a property

Difference Between Movable and Immovable Property

Factors	Movable property	Immovable property
Examples	Jewellery, watches, vehicles, electronic devices, cash, etc.	Any property that falls under the category of real estate. This includes constructions like a manufacturing plant, land, residential house, commercial building, factory, hereditary allowances and more.
Registration	Not needed	Must be registered under the Registration Act, 1908, if its value exceeds Rs 100.
Taxation	Subjected to value-added tax (VAT)	Subjected to stamp duty according to the Indian Stamp Act, 1899
Inheritance	It can be easily partitioned	Does not break or divide easily
Transfer	It is easily transferable	Not transferable in absence of a will, gift deed or partition and simultaneous registration of the property in the beneficiary’s name.
When used as a security	Pledge	Mortgage/lien

Judicial Rights Associated with Movable and Immovable Property

Movable property	Immovable property
Right of warship	Right to collect the rent of an immovable property
Decree of sale of a mortgaged property	Right of ferry
Government promissory notes	Right of way
Standing timber, growing crops and grass	Right of fishery
Royalty	Right to receive future rents and profits of the land
Machine equipment is not permanent, not attached to the earth and cannot be shifted from one place to another.	A factory
A right to recover maintenance allowance even if the allowance is not subjected to immovable property.	Right to collect lace from the trees
Right of purchase of property to have it registered in his name.	Reversion in property leased, etc.

Conditions to Indicate the Intention

There are primarily two conditions that can indicate any intention including:

The degree of annexation: 

• This means that any land will not be harmed by the removal of the property embedded or annexed.
• In case the property is harmed, then it will fall under the category of immovable property, and vice versa.

The object of annexation: 

• This means the usage of the annexed property will be for a long period 

 Ever since the existence of mankind, humans have intended to claim their ownership over certain objects or stretches of land. A few centuries back, during the time of the barter system property transfers were based on word of mouth, and the oral contracts made were considered legal. As time passed, our society kept progressing and along with it grew the idea of property and ownership. 

From the time when Zamindars and Subedars of the respective villages used to control the property ownership and property transfer deals to the time when Britishers colonised our land and included several laws such as the Transfer of Property Act, 1882, in our constitution. The law of inheritance has evolved and several changes were observed in the legal system. 

By now we all understood that a movable property is something that can be easily moved and immovable property is something that is not capable of physical movement and is rooted in the earth. However, there might be cases where the confusion arises and could even lead to a legal conflict in some situations. For example – a tree could be a movable property if it is cut down for wood, but it is considered to be immovable if it is rooted and being used for providing fruits or shade. Sounds confusing, right?

If you are facing trouble with the category classification of your property or need some help with understanding the rights and duties related to movable or immovable property, contact our property law experts at the legal department of NoBroker at minimal costs. 

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