Gift Deed

Gift Deed is a legal document that can be used to transfer movable or immovable property to family, relatives, friends or others voluntarily. The document is considered valid when the transfer does not seek money or any other value in exchange. The description of

'gift' as per Section 122 of the Transfer of Property Act, 1882 states a transfer of any existing movable or immovable property made voluntarily and without any consideration by a donor to the donee. The act also stipulates that the document should be registered as per the Indian Registration Act, 1908.

Types of Transferring a Property

As per Section 5 of Transfer of Property Act, 1882 a living person that includes an individual,

company

, association or a

body of individuals

can transfer property to other living persons, to himself or himself and others. The transfer of ownership can act immediately or in the future. The following are the ways for transferring a property:

Sale Deed
Mortgage
Lease
Will and
Gift Deed

Key Factors of a Valid Gift Deed

The following are the key factors for a valid Gift Deed

The donor must gift without any consideration
The donor and the donee must be alive when registering the deed
The donor should be above 18 years
Any properties mentioned in the Gift Deed shall exist and transferable
The property should be registered
The Gift Deed should be signed by both the donor and donee with witnesses
The Gift Deed should have been drafted as per the Indian Registration Act, 1908

Components to be included in the Gift Deed

Relationship between the donor and donee
Rights, power and executing authority by the donor
Details of the transfer properties with a registered name and address of the property
Details of the donee such as name, address and age

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Role of a Minor

As per Transfer of Property Act, 1882 a minor cannot draft a Gift Deed. However, a minor can receive the gift, but the minor can take over the property only after completing 18 years of age.

Registration of the Gift Deed

The gift deed should be registered as per Section 17 Registration Act, 1908 and Section 123 of the Transfer of Property Act. The gift deed shall be made on a stamp paper and to be registered at a sub-register office. The charges of the stamp paper depend on the charges stipulated by the state government. The gift deed shall be registered with the signature from the donor, donee and two witnesses. The registrar will attest the Gift Deed.

Taxation on Gifts

Property transferred by Gift Deeds is not taxable as per Section 56(2)(vii) of the Income Tax Act, 1961 if received by an individual, Hindu Undivided Family (HUF), from any relatives, marriage or at the time of death. If the donee does not qualify under the following or if the gift exceeds more than Rs.50,000, the gift shall be liable for taxation. Click here to read about

Uttarkhand Property Registration

Types of Property

Immovable Property

Houses
Land and Goods
Mines, Roads and Canals

Movable Property

Cash, Jewels and Ornaments
Vehicles, Computers and Paintings
Machinery, Equipment and Materials

Revoking a Gift Deed

As per Section 126 of the Transfer of Property Act, a registered Gift Deed can be revoked. Hence adding a clause for revoking might provide suitable options. However, if the deed meets the following criteria, revoking might be considered

Registered unlawfully
If the deed is not registered
Registered to a minor
Provided non-existing properties
In case of transfer of funds or equivalent value for the Gift Deed
Donee passes away before acquiring the property
Gift Deed does not meet the criteria of the Transfer of Property Act

Charges

Charges for registering and cancelling the gift deed is applicable. The rates for registering and cancelling the Gift Deed varies in each state.

Documents Required to Register the Gift Deed

Details of ID such as PAN, Aadhaar, Driving License of the donor and donee
Original and copy of the property documents
NOC if the property is an agricultural land
An affidavit stating the validity of the deed as regulated by 22A of the Registration Act, 1908

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Frequently Asked Questions

Common questions about Gift Deed Registration Process and Key Factors.

A Gift Deed is a legal document used to transfer movable or immovable property from one person (the donor) to another (the donee) without receiving any consideration or monetary value in exchange. It is a voluntary transfer of ownership.

As per the Transfer of Property Act, 1882, any living person, including an individual, company, association, or body of individuals, can execute a Gift Deed to transfer their property to another living person, themselves, or themselves and others.

For a Gift Deed to be valid, the donor must gift the property without any consideration, both the donor and donee must be alive at the time of registration, the donor should be above 18 years of age, the property mentioned should exist and be transferable, the deed should be registered, signed by both parties and witnesses, and drafted as per the Indian Registration Act, 1908.

Yes, a minor can receive a gift through a Gift Deed. However, the minor can take over the property only after completing 18 years of age.

Yes, it is mandatory to register a Gift Deed as per Section 17 of the Registration Act, 1908, and Section 123 of the Transfer of Property Act. The deed should be registered at a sub-registrar office on a stamp paper.

Gifts received through a Gift Deed are generally not taxable as per Section 56(2)(vii) of the Income Tax Act, 1961, if received from relatives, on the occasion of marriage, or at the time of death. However, if the gift exceeds Rs.50,000 or is received from a non-relative, it may be liable for taxation.

Both movable properties, such as cash, jewels, vehicles, computers, machinery, and equipment, and immovable properties, such as houses, land, mines, and roads, can be transferred through a Gift Deed.

Yes, as per Section 126 of the Transfer of Property Act, a registered Gift Deed can be revoked under certain circumstances, such as if the deed was registered unlawfully, provided non-existing properties, or if the donee passes away before acquiring the property.

To register a Gift Deed, you will need to provide identification documents (PAN, Aadhaar, Driving License) of the donor and donee, original and copies of the property documents, a No Objection Certificate (NOC) if the property is agricultural land, and an affidavit stating the validity of the deed as per Section 22A of the Registration Act, 1908.

Yes, there are charges for registering and canceling a Gift Deed, which vary from state to state. These charges are usually paid in the form of stamp duty or registration fees.