Gift Deed
Gift Deed
A gift deed is a legal document that represents the transfer of a property in the form of a gift from one person to another.
According to Section 122 of Transfer of Property Act, 1882, a ‘gift’ is defined as the transfer of certain movable and immovable property made voluntarily and without consideration, by one person (Donor) to another (Donee).
A gift deed is valid only if it is given without any consideration in return by one family member to another. Also, under Section 17 of the Registration Act, 1908, it is mandatory to have a registered gift deed
Qualification required for a property for being gifted
- It must be a well-defined movable or immovable property.
- It must an existing property as future properties are not subjected to gift.
- It must be a transferable property.
- It must have tangible character.
Essential elements of gift Deed
- Transfer of property must be wilful and devoid of coercion, fraud or undue influence
- Intention to donate must be there.
- Absence of consideration
- Type of property to be explicitly mentioned
- Should be made directly to the Donee
- Acceptance must be done during the lifetime of the Donor
Procedure
STEP 1: Drafting of a gift deed with essential details.
STEP 2: Printing of gift deed on the stamp paper of appropriate value.
STEP 3: Submission of the printed papers to the registrar or sub-registrar along with:
- Document establishing the ownership of the donor
- Encumbrance Certificate
- PAN Card of both the parties for Execution
STEP 4: Registration of gift deed in the presence of witnesses before the registrar.
STEP 5: The execution of a registered gift deed, acceptance of the gift and delivery of the property together make the gift complete. Thereafter, the Donor is deprived of his title and the Donee becomes absolute owner of the property.
Revocation/ Cancellation of a gift deed
A gift deed may be subjected to revocation the donor and donee agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be.
A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded.
What's included
- Consultation with our Experts
- 1st Draft of Gift Deed
- Final Draft of the Deed after revisions
Documents Required
- Document establishing the ownership of the donor.
- Copy of a Gift Deed
- Encumbrance Certificate
- PAN Card & Aadhaar Card of both the parties for Execution
- Witnesses at the time of Execution
- Any other document prescribed by the state government
FAQ's
A gift deed is a legal document that describes the transfer of a gift from Donor to Donee with applicable requisites.
Any legitimate owner of an existing property can gift property. A gift is considered valid only if it is made voluntarily and without consideration.
A gift deed can be challenged in court on the basis of its legality subject to the law of limitation and proof of its legality.
Minors are not eligible to contract; therefore, they cannot transfer the property as a gift. A gift deed in case of Donor being a minor is not valid in the eye of law. In case of Donee being a minor, his guardian can accept a gift on his behalf. Once the Donee has attained the age of puberty he may either accept the burden or return the gift.
Stamp duty charges differ with each state, according to the value of the property involved.
For Gift Deed in blood relation there is no relief on Stamp Duty, it should be paid as prescribed. Stamp Duty varies from state to state.
For instance, in Haryana, for women it is 5%, for men it is 7% of the market value of the property.
Yes, gifts if received from relatives are exempt from Income taxes. The following are the relatives who accrue no tax liability:
- Spouse of the individual (husband or wife)
- Brother or sister of the individual
- Brother or sister of the spouse of the individual (brother in law or sister in law)
- Brother or sister of either of the parents of the individual (aunts and uncles)
- Any lineal ascendant or descendant of the individual (parents, grandparents, children, grandchildren)
- Any lineal ascendant or descendant of the spouse of the individual, (e.g. father in law, mother in law)
In case of gifting an immovable property to person other than relative, e.g. land or building, the recipient would have to pay income tax if the stamp duty value of the property exceeds Rs. 50,000 and if such property is received without adequate consideration.
The transaction of a gift is said to be completed when the following basic conditions are met with:
- There must be an offer by the Donor
- The Donee must accept the offer
- Delivery of gift
- Absence of consideration
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