Gift Deed

What is a Gift Deed?

A Gift Deed is a document through which a person or persons (i.e. a donor) can transfer its property to another person or persons (i.e. donee) by way of the gift without payment of any money or other consideration. A Gift Deed can be used when a person, being a valid owner of an existing property, wishes to gift his property to someone.

The property or assets under a Gift Deed include real estate, movable property, or other valuable assets. It is commonly used in scenarios such as gifting property to a family member or donating assets to a charitable organization.

What is the difference between a Gift Deed and a Will?

A Gift Deed is different from that of a Will. Under the Gift Deed, the ownership of the property or assets is transferred during the lifetime of the donor. On the other other hand, under will the ownership will only be transferred after the death of the donor. Unlike a Gift Deed, the Will can be amended by the donor during their lifetime.

Is it mandatory to have a Gift Deed?

Yes, Having a written Gift Deed is mandatory if the gift involves the transfer of immovable properties such as buildings or land. Even if it doesn't involve immovable properties, having a written Gift Deed can help establish clear terms and act as legal evidence to protect the rights of each party.

What must a Gift Deed contain?

A Gift Deed must contain the following clauses:

• Parties Involved: Names and Details of the donor and donee.
• Description of Property/Assets: Detailed description of the property or assets being gifted.
• Declaration of Gift: Statement by the donor declaring the intention to gift the property or assets.
• Acceptance by Donee: A statement by Donee accepting the gift.
• Rights and Obligations: Rights and obligations of each party after entering into the Gift Deed.

Who can enter into a Gift Deed?

The donor must be above 18 years of age or any registered entity in India. The donor must act voluntarily and not be under the influence of coercion, alcohol, drugs, or any other influence. A donee can be a person or entity registered in Indian including a minor.

What can be the duration of a Gift Deed?

A Gift Deed is typically executed as a one-time transfer and does not have a duration. Once the Gift Deed is executed and registered, it cannot be revoked or cancelled unless there is some illegality involved.

What has to be done once a Gift Deed is ready?

The Gift Deed would need to be printed on non-judicial stamp paper or e-stamp paper, which is available in certain states. The value of the stamp paper would depend on the state in which it is executed and where the property is situated. Each state in India has provisions in respect of the amount of stamp duty payable on the Gift Deed, and the same would need to be determined based on the specific facts of the case. Information regarding the stamp duty payable can be found on the State government websites.

After printing the document on stamp paper or e-stamp paper, as applicable, the Gift Deed is to be signed and each party can keep a copy of the Gift Deed.

Is it necessary to notarize a Gift Deed?

No, it is not mandatory. However, notarizing the document will add an extra layer of protection.

Is it necessary to register a Gift Deed?

Yes, the Gift Deed involving immovable property must be registered with the local sub-registrar where the property is located.

Is it necessary to have witnesses for the Gift Deed?

Yes, the Gift Deed must have at least two witnesses above the age of 18 years to register it. It is recommended to have two witnesses to support the document in case of any legal disputes in the future.

Which laws are applicable to a Gift Deed?

The provisions of the Transfer of Property Act, 1882 are applicable to gifts of immovable property. In terms of the Transfer of Property Act, 1882 read with the Registration Act, 1908 all Gift Deeds of immovable property are compulsorily registrable.

The provisions under the Indian Contract Act 1872 and the Income Tax Act, 1961 would also be applicable.

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