Explanation –

Statements 1 and 4 are correct. Once a property is designated as waqf, it is considered to be owned by God, and its corpus cannot be sold or inherited. Only the benefits or income generated by the waqf property can be used for the designated charitable or religious purposes. The Waqf Bill 2024 includes a provision that a family waqf should not result in the denial of inheritance rights to the heirs, including women heirs. A Muslim can create a family waqf with up to one-third of their property if they intend to exclude their heirs.

Statements 2 and 3 are incorrect. While religious and charitable waqfs are exempt from paying income tax under the Income-Tax Act of 1961, family waqfs are not generally exempt and are required to pay income tax. Family waqfs are required to pay income tax, even when part of their income is intended for religious or charitable purposes. Additionally, estate duty (a tax on the transfer of property after someone’s death) is applicable when property passes from one beneficiary to another, even though, according to waqf principles, the property is not supposed to be transferred or sold. When the line of succession fails in a family waqf, the income is typically redirected towards charitable purposes such as education, development, and welfare, rather than being absorbed by the state.

Source: The Hindu