GIFT DEED: All you should know

A Gift Deed is an important legal document that signifies a transfer of gift as per the provisions of the law from one person to another. Gift Deed is a lawfully binding written document by which the donor can transfer an existing movable/immovable property to the donee voluntarily, as defined in Section 122 of the Transfer of Property Act, 1822. A Gift Deed is lawful only ‘without any consideration’ in return if given out of love and affection, by one family member/ friend to another. It is obligatory to have a registered Gift Deed if you want to transfer immovable property U/s 17 of the Registration Act, 1908.

What are the essential clauses in a Gift Deed?

You are required to mention certain things in a Gift Deed being a critical legal document.

Those Are As Follows:-

♦ Clause For Consideration It should be mentioned in the Gift Deed that there is no exchange of money or any other type of consideration is involved, and the transfer is being made out of love and affection. It will not be considered as a gift if it is relevant to how small the consideration is.

♦ Possession Of Property It would be best if you were the titleholder of that immovable property in your possession, i.e. the property you want to gift. The property must exist while making a gift because you cannot gift anything that you possibly can get in the future.

♦ Free Consent The transfer should be free from any undue influence, coercion, fear, or threat. The gift should clearly state that transferor has a clear intention of doing so, and the transfer is voluntary.

♦ Property Details An exhaustive description of the property must be included, which may specify the address, structure, color, location, area, etc.

♦ Details Of Donor And Donee To justify, whether they are blood relatives or not, the relationship between donor and donee is important to note. Some state governments also offer a concession on stamp duty if gifts are made to blood relatives.

♦ Rights And Liabilities If any additional rights or liabilities are attached under this clause, it must be declared in the gift deed. Entitlements may include- any rights concerning the further sale or leasing it supplementarily.

♦ Rights Of Donee A distinct indication of Donee rights creates an attached part of the Gift Deed. It includes the donee rights to make changes to the property, enjoy the property peacefully, and get rents or any profits from that gifted property.

♦ Delivery Clause A delivery clause, which would confirm the delivery of the possession of the property, generally talks about the actions of the transfer ‘expressly or implied’.

♦ Clauses For Revocation It is advisable to avoid future complications; however, it is not a mandate. The donor and donee both have to agree on this clause, which needs to be mentioned, not implied.

Who can be a Donor/Donee? Any person who makes the transfer of immovable property is known to be a Donor. Moreover, a donor must be a person who is of sound mind and is competent to agree. Any minor cannot be a donor if the person is not capable of entering into a contract. Any person who accepts the gift/transfer made to him is known to be a Donee. The gift would have to be approved by donee’s guardian on behalf of the donee if in case donee is a minor by age. A minor after attaining adulthood, can either accept the gift or return it in case of the responsible gift (gift attached with some conditions).

Note: It Must Be Noted That All Dues Will Be Shifted On Donee If The Donee Accepts The Gifts Of Which Bills Are Pending.

What type of properties can be gifted? The properties can be gifted as follows:-

  • A movable or immovable property
  • A tangible property
  • A transferable property
  • An existing property

What are Documents required for Gift Deed registrations?

After making sure that your Gift Deed is signed & attested by witnesses, you have to pay the stamp duty and registration charges as per your state regulations.

You need to carry a few other documents like –

  • Aadhar Card
  • ID Proofs, like Driver License, Passport, etc
  • PAN card of both the parties for the execution of Gift Deed.
  • Original Gift Deed to be executed
  • A document like Sale deed to prove donor title to the Property
  • You will require two witnesses at the time of execution of Gift Deed
  • Encumbrance Certificate
  • A document certifying Ready Reckoner Value and
  • Other Agreements which you might have entered into concerning Property
  • Other materials may require according to state requirements

You might need other documents, as this list is not exhaustive. You may need to add like certificates relating to your property’s value, depending on your state, etc.

How to register & what are the steps involved in the drafting of Gift Deed?

Steps Involved In The Drafting Of Gift Deed Are As Follows:-

STEP 1 Draft a deed with the following essentials.

  • Mention the Date and Place for execution
  • Information about Donor and Donee like Date of Birth, Residential Address, Name, and Relationship among them.
  • A total description of the property
  • Presence of Two Witnesses
  • Signatures along with the witnesses of Donor and Donee

STEP 2 Get it printed on the stamp paper of applicable value contingent upon each state Stamp Rate.

STEP 3 Lastly, kindly get Gift deed registered at your registrar/sub-registrar office.

What are the respective stamp duties for registering Gift Deed?

Go for the printing of your stamp paper with the appropriate value and get it registered at the registrar office after you are done with drafting the Gift Deed. Stamp duty can be paid either by buying stamp paper, or it can be done online (e-stamp) in which the pay varies state by state.

♦ Delhi For Man 6% and Women 4% (market value of the property)

♦ Karnataka It is 5.6% of the land value if the transfer is to non-family members. It can range from 1000/- to 5000/- in case of family members depending upon the property location.

♦ Gujarat 4.9% of Market Value

♦ Punjab 6% of property value. No Stamp Duty in case of a blood relative

♦ Rajasthan None for Widow, Female- 4%, 3% in case of SC/ST or BPL, Male -5%, 1% in support of daughter or wife, 2.5% in case close family members like daughter, in-laws, son, mother, father, granddaughter or grandson

♦ Uttar Pradesh 7% for Man and 6% for Women (Total value of the property)

♦ Maharashtra If the residential property or Agricultural land-Rs.200, 3% in the case of Family members, 5 % in case of Relatives

♦ Tamil Nadu 1% for family members and 7% for other relatives

♦ West Bengal 1% surcharge above 40lac, 0.5% if transferred to family members, 6% in other cases                                                                                                                                       

G I F T     D E E D BE IT KNOWN TO ALL CONCERNED that the undersigned MR………….. residing at ________________ does hereby declare and confirm that, in consideration of the natural love and affection which the Donor has and bears for MR.______________ ( Father of Donor), actually gave by words of mouth and also expressed herself to give up to and to the use of the done freely and voluntarily, absolutely and forever the property mentioned in the schedule.

The schedule above referred to :

S.NO                       Date                                                   Description                                                        Value ( Rs.)                                                                                      Flat at Mahangar Lucknow    Address: IN WITNIESS WHEREOF the parties to these presents have here unto set and subscribed their respective hands and seals this (dated) ……………………………….

SIGNED, SEALED AND DELIVERED BY the with named Donor MR.____, Lucknow, in the presence of …………………………………………….. executed by the Donee MR._________  at Lucknow in the presence of …………………………………………………

                                                                                                                                                          Signature. P L A C E       : LUCKNOW D A T E D       :