A Gift Deed is referred to as a legal instrument through which a person (called as donor) transfers ownership of movable or immovable property to another person (called as donee) without any consideration, purely out of love and affection, as a “gift”. Gift deeds in India are governed by the Transfer of Property Act, 1882, and is a commonly used method of transferring assets to the loved ones. Both movable and immovable assets can be gifted through a gift deed. According to Section 122 of the Transfer of Property Act, 1882, a “Gift” is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. It is however important to note that the acceptance of gift is an important phenomenon and the acceptance must be made during the lifetime of the donor, while he is still capable of giving. If the donee dies before acceptance, the gift is void.
What are the essential elements of a valid Gift
For a Gift Deed to be validly effected, the following conditions must be met: 1. The transaction must be Voluntary- For a gift deed to be legally executed, the transfer pf ownership of the assets must be made voluntarily, without any fraud, coercion, undue influence or misrepresentation. 2. The transaction must be without any consideration- A valid gift must necessarily be without any consideration, and should be purely out of love and affection. 3. A gift Deed must be registered- The transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. 4. Existing Property- Only existing property can be gifted via a gift deed. Future property cannot be transferred via a gift deed. 5. Acceptance by Donee- The donee must accept the gift during the lifetime of the donor. This is an important phenomenon of a valid gift deed.
Procedure for Registration of Gift Deed in India
1. Drafting of the gift deed- The gift deed should be meticulously drafted by the experts that should contain details of the donor & donee, describing the property details and reason for transfer. 2. Payment of Stamp Duty – The stamp duty to be paid on a gift deed is ascertained based upon the market value of the property/asset which forms part of the gift deed and the relationship between the donor & donee. 3. Execution of the deed & its registration- The deed must be signed by the donor and attested by at least two witnesses before the Sub-Registrar office falling within the jurisdiction of either the asset to be gifted or the residence of the donor. The donee should necessarily accept the gift. Generally required documents for registration of a gift deed are- a) Original title documents of the assets to be gifted b) Identification documents of the donor, donee & witnesses c) Passport size photographs of the donor, donee & witnesses
Difference Between a Gift and a Will
BASIS OF DISTINCTION
GIFT
WILL
Meaning
A gift is a transfer of a movable or immovable asset by the donor to a donee, voluntarily without consideration during the lifetime of the donor, out of love and affection.
Will is a testament made by the testator, during his lifetime, iterating his intention regarding distribution of his estate after demise.
Governing Law
Transfer of Property Act, 1882
Indian Succession Act, 1925
Effect
Immediately, upon execution and registration, during the lifetime of the donor
Only comes into play after death of the testator
Registration
Compulsory for immovable property
Not mandatory, but generally advisable
Stamp Duty
A stamp duty is payable, depending on the asset, which may vary from state to state
Stamp duty is not to be paid
Probate
Not required
May be mandatory in certain jurisdictions (e.g., Mumbai, Chennai, Kolkata)
CONCLUSION
Execution of a gift deed therefore shall be done strictly in accordance with law as the said document is a transfer document and vests the right/ownership of the property with the donee.
Frequently Asked Questions
A gift deed generally cannot be registered online. The deed must be signed by the donor and attested by at least two witnesses before the Sub-Registrar office falling within the jurisdiction of either the asset to be gifted or the residence of the donor. The donee should necessarily accept the gift.
A Gift Deed is referred to as a legal instrument through which a person (called as donor) transfers ownership of movable or immovable property to another person (called as donee) without any consideration, purely out of love and affection, as a “gift”.
A gift deed must be signed by the donor and attested by at least two witnesses before the Sub-Registrar office falling within the jurisdiction of either the asset to be gifted or the residence of the donor. The donee should necessarily accept the gift.
As the stamp duty is payable depending on the property and its jurisdiction, the cost for registration of gift deed varies in all cases.
• Original title documents of the assets to be gifted
• Identification documents of the donor, donee & witnesses
• Passport size photographs of the donor, donee & witnesses
No, A gift deed generally cannot be registered online.
A gift deed can be attested by a notary public, by approaching a notary and getting it attested, however, registration of a gift deed is mandatory and attestation is not same as registration. An attestation can be done by a notary public, however, the registration is done before the office of the Sub-Registrar.
• Avoidance of future disputes
• Proof of ownership.
• Works as a title
documents.
• Transfer of ownership.
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