Introduction
Cash gift deeds are agreements that allow the person paying the money to send money to the donee without any other exchange or consideration. In this case, it represents a sum of money that was voluntarily transferred from one person to another. As well as the amount to be transferred, the act specifies the terms of the gift.
We will discuss why it is important to keep a gift deed when gifting cash in this article.
Gift deeds are important for gifting cash
Especially when giving a large sum of money, a gift deed for cash is an essential document to keep with yourself, as it documents the gifting act. As a result, a legally binding record is created. Gift deeds serve as evidence of a gift transfer for both the donor and the donee, preventing future confusion and misuse.
Gift Deeds for Cash Gifts: What Should They Include?
In a cash gift deed to family members, the following points should be addressed:
- Details about the donor and donee (their names, dates of birth, residences, relationships, fathers’ names, etc.)
- An amount of money given as a gift,
- If the gift has a reason, please explain it.
- An indication that the act was voluntary, not coerced or forced
- There should be a clause stating that the donor is not insolvent,
- Clause stating that the gift is being made without payment.
- Transaction date and location,
- Please let me know if there are any conditions or requests.
- Both the donor’s and recipient’s signatures
- Contact information for two witnesses as well as their signatures
Cash Gifts Require Gift Deeds
A gift deed does not require any specific documents. In order to verify the identities and residential addresses of the donor and donee, the parties’ IDs should be scrutinized. It is also possible to analyze documents that prove the donor owns the bank accounts.
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Cash Gift Deed Process
It is necessary to consult a lawyer when formulating a cash gift deed. Considering that gifting is a willful act, the gift deed should clarify that the donor will give the money voluntarily and without coercion. A deed should also state the donee’s acceptance of such a gift by his signature. Registries are required to register gift deeds for cash under the Registration Act. It may also be necessary to pay stamp duty based on the state’s laws and the value of the gift.
The Legal Considerations of a Gift Deed
The Registration Act of 1908 does not require that a cash gift deed be registered; however, it may be registered in order to maintain a record of the transaction. If there is any kind of dispute regarding a gift deed, the registration can be used in court as evidence.
In the gift deed, the Donee should acknowledge the gift and the Donor should acknowledge his willingness to provide the cash. Donors should also state in the donation deed that they are not bankrupt (i.e. solvent), that they are giving the gift freely and without expectation of remuneration.
Unlike other countries, India prohibits minors from entering into contracts and thus making valid gift deeds; however, a custodian can accept gifts on their behalf. A gift cannot be revoked once it has been made. In addition, gifts given by the donee to family members are tax-free under the Income Tax Act.
How a Lawyer Can Help You Draft a Gift Deed for Cash
Drafting a gift deed requires the assistance of a lawyer. It is essential to hire a lawyer to draft and execute a gift deed, as it is a legally binding document. It is easier to draft, register, and stamp a gift deed with the assistance of a documentation lawyer due to his years of experience handling gift deeds. When transferring funds via gift deed, he or she can ensure that all legal formalities are followed because they will not cause any legal harm to the donor or donee.
Final thoughts
In India, property transfers as gifts are governed by the Transfer of Property Act, 1882. A property gift involves transferring ownership of one’s assets to another person through the execution of a gift deed. An immovable or movable property owner transfers his or her property as a gift without any consideration by means of a gift deed.
The person who gives the gift is known as the donor, and the person who receives it is known as the donee. The donor must gift assets to the donee on a voluntary basis for the gift to be valid under the Act. In order for a gift to be legally valid, it must be accepted by the donee during the donor’s lifetime.
A gift of immovable property becomes effective once the gift deed is enrolled with the appropriate Registrar or Sub-Registrar. Upon the enrollment or delivery of the gift deed, movable property becomes beneficial. A registered gift deed transfers property instantly from the donor to the donee, and the parties do not have to go to court to execute it. The gift deed must be registered when the donor wishes to give immovable property to the donee. Gift deeds are given out of love and affection for the donee without any expectation of compensation.
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