What is a Gift Deed?
A gift Deed is an official document that demonstrates a transfer of a gift between one individual to another according to the provisions of the law. The Gift Deed is a legally binding document defined in Section 122 of the Transfer of Property Act 1822. It is a legal document that allows the donor to transfer existing movable or immovable property to the donee voluntarily.
The Gift Deed is only valid when it is given out of love without any consideration in return by one person to the other. In addition, according to Section 17(1) of the Registration Act of 1908, it is required to obtain a Gift Deed when you wish to transfer immovable property.
Important clauses in a gift Deed
As it is a very crucial legal document, there are certain things that you have to include in a Gift Deed. Some of them are-
- Consideration Clause: It must be explicitly stated in the Gift Deed that the transfer is made out of love and affection, and no monetary or any type of consideration is involved. No matter how small the amount of consideration is, it would not be considered a gift.
- Possession of the property: The property that you wish to donate must be your property, i.e. you must be the titleholder of that immovable property.
- Free Will: The gift must be free from any kind of pressure, influence, threat or fear. The gift must clearly state that it is made voluntarily.
- Information about the Property: A detailed description of the property is required. It should clearly describe the address, structure, location, area, etc.
- About: Donor and Donee: The relationship between the donor and donee is important as to whether the two are blood relatives or not. Certain states also provide an exemption on gift deed stamp duty if gifts are given to blood relatives.
- Rights of Donee: Clear mention of Donee’s rights is an integral part of the Gift Deed. It covers the donee’s rights to live in the property peacefully, make any changes to the property, and receive rent or any other profits that might arise from the property.
Who can be a donor/donee?
A donor is a person who transfers immovable property. Anyone who is in good health and has the capacity to sign a contract is a potential donor. A minor cannot be a donor since they aren’t capable of signing a contract.
A donee is a person who accepts the gift or transfer made to him. Minors can be a donee, but the guardian must accept the gift on behalf of the donee. Incase of an onerous gift(a gift subject to a set of conditions), a minor who has reached adulthood can either accept the gift or return it.
The steps involved in the writing of a Gift Deed
A Gift Deed should include the following:
1: Draft a deed incorporating the following elements.
- Date and location where the deed will be executed
- Information about the Donor and Donee such as Name, Residential Address, Relationship between them, Date of Birth, etc.
- Information about the property
- Two Witnesses
- The signatures of Donor and Donee, together with the witnesses
2: Have it printed on the stamp paper of the appropriate value based on your state.
3: Get your deed registered at your registrar or sub-registrar’s office.
Documents required for Registration Of Gift Deed
Make sure that the gift Deed is properly signed and attested by witnesses and that you’ve paid the registration charges and stamp duty on gift deed in accordance with your state’s laws. You will need to bring a few other documents, such as:
- Original Gift Deed
- ID Proofs, like Driver License, Passport, etc
- PAN Card
- Aadhar Card
- A document like a sale deed to show the donor title to the property
- Other agreements which you might have signed in relation to property
How do I register the Gift Deed in India? What is the stamp duty in each state when signing a Gift Deed?
After you’ve drafted your Gift Deed, print it on a stamp paper of appropriate value and register it at the registrar’s office. The stamp duty you are required to pay differs from state to state. You can pay the stamp duty either by purchasing stamp paper of such value, or it can be done online.
Can a Gift Deed be revoked/cancelled?
A gift, once made and registered in accordance with the procedure of law, cannot be revoked. Once the gift is accepted, it is the sole property and possession of the donee. The donor cannot unilaterally cancel the deed. A deed where both parties have agreed that the deed shall be revocable, in part or whole, through the simple consent of the donor cannot be considered a valid gift Deed.
However, according to Section 126 of the Transfer of Property Act 1882, there are certain circumstances under which gifts can be revoked. The revocation incorporates the cancellation of the Gift Deed, and the possession of the property is transferred to the donor. The reasons are:
- If there is a contract between the donor and the donee that if specific circumstances occur or don’t occur, the gift shall be revoked. Moreover, one thing to keep in mind is that the occurrence of such an event cannot be determined by the donor. Also, Both parties must agree to such a clause in the gift Deed.
- The conditions specified must not be unlawful, immoral, or objectionable to the property.
Frequently Answered Questions (FAQs)
Is the registration of a Gift Deed mandatory?
Yes, registration with the sub-registrar is required for gifts involving immovable property as per Section 123 of the Transfer of Property Act, 1882 and Section 17 of the Registration Act, 1908.
What is the difference between a gift deed and a sale deed?
Both deeds serve as a means for the transfer of property. The only difference lies in the form of consideration. In the sale deed, the property is given in exchange for a certain amount. However, in the Gift Deed, the transferor takes nothing.
Is there an exchange of money involved in the Gift Deed?
There isn’t any exchange of money involved in the Gift Deed. If there is an exchange of something or any kind of consideration with a value, it will not be considered a valid Gift Deed.
Can Gift Deed be challenged in court?
Yes, the Gift Deed can be challenged if the deed was made under threat, coercion or against the will of the donor.
What if the donee does not accept the gift?
If the person receiving the gift doesn’t want to accept the gift, the donor can’t force them to accept it. The deed shall only be effective if the donee accepts the gift.
Can the donor claim back the gifted property?
Once the Property has been transferred via the registered gift Deed, the donor cannot claim the property back unless they can prove that the deed was made under coercion, threat, undue influence or against the will of the donor.
Is Gift Deed a legal document?
Yes, The Gift Deed is legal evidence of the property transfer from the donor to the donee.
Does the donor need to pay stamp duty after receiving the Gift Deed?
In accordance with the law, the donee is accountable for pending fees like maintenance, electricity, and so on.
