What Is A Gift Deed?

A Gift Deed is a legal document that records the voluntary property transfer from the donor (giver) to the donee (receiver) without any monetary consideration. Unlike a sale or a will, a Gift Deed facilitates the transfer of ownership rights immediately and irrevocably during the lifetime of the donor.

The Property Act 1882 covers the Gift Deed that facilitates the voluntary transfer of property from a donor to a donee without any exchange of money. As per Property Act 1882 Gift Deed:

• The gift property to be transferred must remain or should have existed while deed making.
• The Donor must be the lawful owner of the property that will be gifted with a clear title.
• The Gift should be clean and voluntary without any coercion.
• The Gift should be free from any monetary/otherwise consideration.
• The Donee (who will receive the gift) should accept the gift of property.

A gift deed can include both movable and immovable properties like land or house.

Its Components

A well-drafted Gift Deed must include the following key components:

• Details of Donor and Donee: Full names, addresses, and relationship between the parties.
• Description of the Property: Detailed description of the gifted property, including its location, size, and boundaries.
• Transfer Clause: A clear statement indicating the donor's intention to give the property without any coercion or monetary exchange.
• Acceptance Clause: Confirmation that the donee accepts the gift.
• Signature and Witnesses: Signatures of both parties and at least two witnesses.

Properties That Can Be Transferred Through Gift Deed

• Residential Property
• Commercial Property
• Agricultural Land
• Movable Assets (Jewelry, Vehicles, etc.)
• Shares and Securities

Also, to know what properties you can give as a gift, read - Properties That Can Be Gifted Through a Gift Deed.

What Is The Format Of the Gift Deed?

The format of a Gift Deed generally includes the following sections:

• Title: "Gift Deed"
• Date: The date of execution of the deed.
• Parties Involved: Detailed information about the donor and donee.
• Property Description: Comprehensive details of the property being gifted.
• Consideration Clause: Statement that the gift is made out of love and affection without any monetary exchange.
• Transfer Clause: Statement confirming the transfer of ownership.
• Acceptance Clause: Donee's acceptance of the gift.
• Signature and Witnesses: Signatures of the donor, donee, and witnesses with their names and addresses.

Example of a Gift Deed Format:

Gift Deed

• Date
• Parties Involved
• Property Description
• Consideration Clause
• Transfer Clause
• Acceptance Clause
• Witness 1 Signature
• Witness 2 Signature

How To Register Your Gift Deed?

Registering a Gift Deed is a crucial legal step to ensure the transfer of property is valid and recognized by law. Follow these detailed steps to register your Gift Deed:

1. Drafting the Gift Deed:

• Prepare a detailed Gift Deed document including all necessary components such as the details of the donor and donee, property description, consideration clause, transfer clause, acceptance clause, and the signatures of both parties and witnesses.

2. Stamp Duty Payment:

• Calculate the applicable stamp duty based on the market value of the property. Stamp duty rates vary by state and typically range between 2% to 7% of the property's market value.
• Pay the stamp duty through a designated bank or e-stamping facility. Ensure you obtain the stamp duty payment receipt, which is essential for the registration process.

3. Execution of the Deed:

• The Gift Deed must be signed by the donor and the donee in the presence of at least two witnesses. All parties, including the witnesses, must sign the deed to validate it.

4. Presentation for Registration:

• Present the signed Gift Deed along with the required documents at the local Sub-Registrar's office within four months from the date of execution. If the presentation is delayed beyond this period, penalties may apply.

5. Verification Process:

• The Sub-Registrar will verify the details mentioned in the Gift Deed, including the identities of the donor, donee, and witnesses. The Sub-Registrar may also verify the property details to ensure accuracy.

6. Payment of Registration Fee:

• Pay the registration fee, which is typically around 1% of the property's market value, subject to a maximum limit that varies by state. This fee is in addition to the stamp duty.

7. Document Submission:

• Submit the following documents at the sub-registrar's office:
• Original Gift Deed
• Identity proofs of the donor and donee (Aadhar Card, PAN Card, Passport)
• Address proofs of the donor and donee
• Property documents (Title Deed, Property Card, Encumbrance Certificate)
• Passport-sized photographs of the donor and donee
• Identity proofs and addresses of the witnesses

8. Registration and Endorsement:

• Once the verification is complete, the Sub-Registrar will endorse the Gift Deed by affixing an official seal and signature, making it legally binding. The registered Gift Deed will be returned to the parties after completing the formalities.

9. Record Maintenance:

• The Sub-Registrar’s office will retain a copy of the registered Gift Deed for record-keeping purposes. The original deed will be handed back to the donee.

Summary of Required Documents:

• Original Gift Deed
• Stamp duty payment receipt
• Identity proofs (Aadhar Card, PAN Card, Passport)
• Address proofs
• Property documents (Title Deed, Property Card, Encumbrance Certificate)
• Passport-size photographs
• Witnesses’ identity proofs and addresses

Gift Deed Registration With Stamp Duty

Stamp duty is a crucial aspect of registering a Gift Deed. The rate of stamp duty varies across different states in India. It typically ranges between 2% to 7% of the property's market value. Additionally, a registration fee, usually 1% of the property's value, is also applicable.

How To Cancel A Gift Deed?

Canceling a Gift Deed is complex since it is generally irrevocable once registered. However, it can be revoked under certain conditions:

• Mutual Agreement: Both donor and donee agree to cancel the deed.
• Coercion or Fraud: If the donor proves that the deed was executed under coercion, fraud, or undue influence.
• Violation of Conditions: If specific conditions mentioned in the deed are violated.

The revocation process requires filing a suit in court and proving the grounds for cancellation.

Which Is Better: Gift Deed or a Will In India?

Gift Deed:

• Best for those who wish to transfer property immediately and irrevocably.
• Provides clarity, reduces the risk of legal disputes, and offers potential tax benefits.
• Suitable for partial transfers, avoiding probate, and providing immediate financial benefits to the donee.

Will:

• Ideal for those who want to retain control over their property during their lifetime.
• Offers flexibility in modification and comprehensive estate planning.
• Suitable for conditional transfers and creating trusts for dependents.

Ultimately, the choice between a Gift Deed and a Will depends on individual circumstances, goals, and preferences. For immediate, uncontested property transfer with potential tax benefits, a Gift Deed is a compelling option. For future transfers with ongoing control and flexibility, a Will may be more appropriate. Consulting with a legal expert can help in making the best decision tailored to your specific situation.

About WillJini

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The most skilled succession planners in the business work for WillJini as part of its internal legal team. Reach us by phone at (+918767404044/9321671899), email at support@willjini.com, or through our website at willjini.com.

FAQ

What if Property is Gifted to an NGO?

Gifting property to an NGO follows the same process as gifting to an individual. Ensure the NGO is a registered entity to avail tax exemptions.

What to Do if a Gift Deed is Not Accepted by the Party?

If the donee refuses to accept the gift, the deed becomes null and void. The donor retains ownership of the property.

Can the Gift Deed Be Revoked?

Generally, no. However, it can be revoked under mutual agreement, proof of coercion or fraud, or violation of specific conditions.

WillJini is India's most trusted Succession Planning company and over the past 10yrs, has helped thousands of individuals in Estate Planning from the comfort of their homes.

WillJini's in-house team of lawyers are industry's most experienced succession experts. You can get in touch with us via call (+91 8767404044 / 9321671899), email (support@willjini.com) or our website (willjini.com)