What is a Gift Deed?
In India Gift Deed is a legal document that represents the transfer of gift from one person to other according to the provisions of the law. In India a Gift Deed is a legally binding written document defined under Section 122 of the Transfer of Property Act, 1822. Under this Section the donor is eligible can transfer an existing movable or immovable property to the other person i.e. donee voluntarily.
A Gift Deed in India is valid only if such a gift is given out of love and affection, without any amount of consideration in return by one family member or friend to another. Also, as per Section 17 of the Registration Act, 1908, it is mandatory to have a Gift Deed Registration in India when the donor wants to transfer the immovable property.
The following properties can be gifted by making a Gift Deed in India:
- A movable or immovable property;
- An existing property;
- A tangible property;
- A transferable property;
Who can be a donor and donee under Gift Deed in India?
A donor is any person who makes the transfer of the immovable property. Any person who is of a sound mind and is competent to enter into any agreement can be a donor. Any minor cannot be a donor as he or she is not capable of entering into a contract.
A donee is any person who accepts the gift or transfer made to him. A minor can be a donee however, the gift would have to be accepted by the guardian of the donee on behalf of him or her. In case of the onerous gift i.e. a gift attached with certain conditions), a minor after attaining his or her adulthood, can either accept the gift or return it.
What are the important clauses in a Gift Deed in India?
The applicantis required to mention certain important things in a Gift Deed being a critical legal document.
Those important things are as follows:
- Clause for Consideration
This clause should be mandatorily mentioned in the Gift Deed that there should notbe any exchange of money or any other type of consideration is involved, and the such a transfer of property is being made out of love and affection. The transfer will not be considered as a gift if there is any amount of relevant consideration irrespective how small it is.
- Free Consent
The transfer by the donor should be free from any kind of undue influence, fear, coercion, or threat. The gift should clearly mention that transferor has a very clear intention of doing such a transfer, and the transfer is voluntary.
- Rights and Liabilities
If any kind of additional rights or liabilities are attached under this clause, it is required to be declared in the gift deed. The entitlements may include any such rights concerning the further leasing or sale of the deedsupplementary.
- Property Details
An exhaustive description of the gifted property must be included. The description may specify the structure, address, color, area, location, etc.
- Possession of Property
It would be best if the applicanthimself or herself is the titleholder of that immovable property in the possession, i.e. the property applicant wants to gift. The property should exist while making a gift of the same because a donor cannot gift anything that he/she possibly can get in the future.
- Details of Donor and Donee
To justify clearly, whether the donor and donee are blood relatives or not, the relationship between both of them is important to note. Some state governments in India also offer a concession on the stamp duty if gift deedis made to blood relatives.
- Delivery Clause
A delivery clause in Gift Deed, will confirm the delivery of the possession of the property.This clause generally talks about the actions of the transfer of property ‘expressly or implied’.
- Rights of Donee
A distinct sign of the rights of Donee creates an attached part of the Gift Deed in India. This clause includes the rights of donee to make changes to property, enjoy the property peacefully, and get rents or any kind of profits from that gifted property.
- Clauses for Revocation
It is always advisable to avoid any kind of future complications; however, it is not mandatory. The donor and donee both are required to get agreed on this clause, which should be mentioned, not implied.
What are the essential documents required for Gift Deed Registration in India?
After making sure that the Gift Deed is signed and attested by the witnesses, the applicant is required to pay the stamp duty and registration charges as per the state regulations. The applicant is needed to carry a few other essential documents which are as follows:
- Aadhar Card of the applicant;
- Identity Proofs, like Driver License, Passport, etc;
- PAN card of both the parties for execution of the Gift Deed;
- Original Gift Deed that is to be executed;
- A document like Sale deed to prove the title of the donor to the Property;
- A total of two witnesses are required at the time of execution of Gift Deed;
- The Encumbrance Certificate;
- A document certifying the Ready Reckoner Value; and
- Any other agreements which the applicant might have entered into concerning Property;
- Other essential materials as may be required according to the state requirements
The applicant might need some other documents, as the above-mentioned list is not exhaustive. The applicant may need to add certain documents like certificates relating to the value of property depending on the different state, etc.
What are the steps involved in the drafting and Registration of Gift Deed in India?
The steps involved in the drafting of a Gift Deed are as follows:
The initial step in the process of Gift Deed Registration in India is to draft a deed with the essentials which are as follows:
- Mention the Date and Place for the execution;
- Information in detail about Donor and Donee like Date of Birth, Name, Residential Address,and Relationship among them;
- A total detailed description of the property;
- The Presence of Two Witnesses;
- Signatures of the parties along with the witnesses of the Donor and Donee;
Get the drafted gift deed printed on the stamp paper of the applicable value contingent upon Stamp rate of each state.
Lastly, the applicant is required to get the Gift deed registered at the office of registrar or sub-registrar.
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Gift Deed FAQs
A Gift Deed in India is a document that records the act of giving a gift. The Gift Deed is executed between the donor i.e. the person giving the gift and the donee i.e. the person receiving the gift. A gift can be made of a movable or immovable property that is tangible and transferable.
A Gift Deed is a formal legal document that is used to give a gift of property or money to any other person. It transfers the money or ownership of the property (or share in any property) to any other person without the demand of any payment in return. Giving a gift to someone else can have some kind of Inheritance Tax implications.
When a gift made by an applicant is incomplete and the title remains with the donor the gift deed may be cancelled. There is no provision in the law that ownership in the property cannot be gifted without a transfer of possession of such a property.
Property inherited through Gift and Will are not ancestral properties. Any property gifted by a father to his own son or daughter cannot not become an ancestral property in the hands of the son or daughter simply by reason of the fact that he got it from his own father.
A gift deed can be challenged by a person if it is proved that the gift deed was executed by the grandfather of such person as a result of some fraud being practiced on him or as a result of any kind of misrepresentation of the facts or under some undue influence or that he has not exercised his free will or the execution of the said gift deed.
The transfer of property by the donor should be free from any fear, undue influence, coercion, or threat. The gift should clearly state that the transferor has a clear intention of doing so, and the transfer is done voluntarily.
Any person who makes the transfer of the immovable property is known to be a Donor. Moreover, a donor should be a person who is of a sound mind and is competent to agree. Any minor cannot be a donor as he/she is not capable of entering into a contract.
Stamp duty of a Gift Deed can be paid either by buying the stamp paper, or it can be done online via e-stamp in which the pay varies from state to state.