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Giving a gift is one of the most common ways to express affection and love to a family member. However, only a few know about the legal implication of gifting something. A gift deed is valid only if it is given out of love and affection, without any consideration in return by one family member/friend to another.
Legally, a gift of movable or immovable property can be given by executing a gift deed. A gift deed is a legal document that represents a transfer of gift from one person known as the donor, voluntarily to another person known as the donee or receiver.
A properly executed gift deed transfers all the rights and obligations relating to a property/gift from the owner to the receiver who becomes the absolute owner of the property. A gift deed must clearly state the description of property gifted and the name of the owner and receiver.
Section 17(a) of the Registration Act states that any gift of immovable property must be executed through a registered gift deed. Before planning to execute a gift deed, it is also important to know about what can and cannot be gifted under the law. Section 122 of the Transfer of Property Act, 1882(1) defines a gift as:
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The first and foremost step is to hire an expert property lawyer to get your gift deed made and evaluated. As it is a contract, the donor and receiver must be eligible to enter into a contract and the gift deed must be made without any coercion or compulsion for it to be valid. Thus, a minor i.e. someone who is under the age of 18 years cannot be a donor.
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If a property is gifted to a minor, it can be accepted by his/her legal guardian on their behalf. It must be accepted during the lifetime of the donor, otherwise, it would be rendered invalid under the property laws in India(2). The minor can accept or reject the gift after attaining the age of majority.
Under Section 123 of the Act, the title of the gift is not passed to the receiver unless the gift deed is registered. Registration of a gift deed is done in accordance with the Registration Act, 1908(3). Registration charges of a gift deed are based on the value of the gift.
For completing the registration of a gift deed, the following formalities need to be fulfilled:
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To get your gift deed executed in the most effective and hassle-free way, hire from among the top property lawyers via Myadvo.
A gift deed for an immovable property cannot be revoked or cancelled by the donor at a later stage unless there is a specific provision that allows the donor to do so. Under Section 126 of the Transfer of Property Act, the gift deed may get revoked or suspended if the donor and receiver agree that on the happening of a specific event, the gift would be revoked. A gift deed may be revoked if it clearly mentions that the donor or their legal heir would get the property back upon the death of the donee.
The format of the gift deed remains the same whether the property is movable or immovable. The gift deed must include the date and place where the gift deed registration is taking place, details of the donor and receiver, the relationship between them, and details of the gifted property.
Need to get your gift deed registered? Talk to the legal experts at MyAdvo! Email us at firstname.lastname@example.org or call now at 9811782573.
1. Do we have to register the gift deed?
A: Chapter 17(a) of the Registration Act 1908, that deals with the transfer of property, makes registration of gift deed compulsory.
2. Can you sell a gift deed?
A: Yes. It is yours so you can do what you want with it. But once gifted, it cannot be revoked until proved the transfer was forced through fraudulent means.
3. Is gift deed a legal document?
A: Yes. The deed document is legal proof of property transfer from one to another.
4. Does tax imply on gift deeds?
A: If the total amount/value of the deed does not exceed Rs 50,000 in a year, it is exempted from tax.
5. Does the donee have to pay stamp duty after receiving the gift deed?
A: Yes. As per property transfer laws, the donee becomes liable to pay pending dues such as electricity bills, maintenance, etc.
Prachi Darji is an expert corporate lawyer, currently associated with MyAdvo as an in-house legal advisor. She has finished B.Sc, LLB(Hons.) from Gujarat National Law University. She has an expertise in various domains of law including Intellectual Property Law, Company law, etc. At MyAdvo, she is taking care of litigation strategies and internal legal processes.