A Gift Deed can be used to give a gift to a colleague, close relative, or charitable organization. Implementing this documentation can prevent inheritance disputes. Whenever two people agree to share property without exchanging money, a legal document called a Gift Deed outlines how the property will be divided. According to Section 17 of the Registration Act, 1908, the landowner must register the facility with the sub-registrar before transferring it to another person or organization; however, the gift must be received while the donor is still alive. A Gift Deed usually includes information about both the assignor and the recipient. If a future lawsuit arises, it is beneficial to have a gift deed on file.

Gift Deed Eligibility 

A gift deed must be properly documented by the donor. Charitable acts cannot be performed on minors under the law. It is possible to make an exception to this provision when a natural custodian is nominated to assist in asset management, but the donee is not yet of legal age. The beneficiary must also be alive in order for the asset to be genuine.

Provisions of the deed

The following elements must be included in a donation deed:

  • The date and location of the recording of the deed
  • Name of donor, date of birth, father’s name, and place of birth
  • The recipient’s name, date of birth, and place of birth, as well as their relation to the donor.
  • Recipient information.
  •  A donor-donee relationship exists in this scenario.
  • Describe the asset that was provided
  • The giver and recipient of the gift must be identified.
  •  The names of the witnesses who witnessed the transfer of the property.
  •  Declarations signed by witnesses attesting to the authenticity of their signatures

Transfer of Deeds 

  • Template for gift deeds

A gift deed is a formal document detailing the transfer of property drafted by an attorney. This document should include information about the new employee. There should be no violence or animosity involved in relocations as a general rule.

  • Agreement acknowledgement

When the recipient receives the property while the giver is still alive, the gift transfer is completed. This is the process of taking possession of an asset as a way to acknowledge the contract.

  • Registration

Only registered property can be transferred with a gift deed. A minimum of two people must witness the act. Depending on the state, different observers are required to prove a case.

A gift deed, proof of identity (such as a PAN card or Aadhaar card), real estate deeds, and other agreement-related documents fall into this category.

  • Involvement charges

A stamp duty and processing fee are required for the registration of a gift deed. The stamp duty varies from state to state. Stamp duty rates are the same for gifts of property investment as for sales of conveyancing documents. For the transfer of property via sale or gift deed, Delhi imposes a 4% male stamp duty and a 6% female stamp duty. Council tax for male inhabitants of West Bengal’s panchayat regions and municipal areas is 5% and 6%, respectively.

The fee varies from Rs 1,000 to Rs 5,000 for non-family individuals in Karnataka in addition to 5.6% of the property value. In Uttar Pradesh, stamp duty has been abolished for transfers of family property. The previous stamp tax on these acquisitions was seven percent. Depending on the state, the registration fee may be waived if the asset is gifted.

When transferring property to a trust or non-profit organization, is stamp duty required?

Stamp duty isn’t payable if the property is donated to a non-profit organization. If you have any questions about the rules, be sure to contact your institution’s registrar department. Non-profit organizations cannot receive real estate as a charitable donation in several jurisdictions.

A gift deed can be revoked, but how?

In accordance with Section 126 of the Transfer of Property Act, a gift deed can be canceled if the following conditions are met:

  • Both the giver and the recipient have agreed to terminate the deed for various reasons.
  • Due to the receiver’s refusal to accept the item, the transferor was entirely in control of the ownership change.
  • It is illegal, unpleasant, and morally wrong for the Gift’s property conditions to be as they are.
  • It is possible for a gift to be returned if it is the result of fraudulent or criminal behavior.
  • Including a clause in a gift deed stating that a gift is being revoked is essential to revocation. To avoid further complications, a “dismissal clause” is necessary.

Property Transfer Types

Those who are still alive can transfer their property to another active person, or they can share it with themselves and other living people. It is possible to transfer ownership immediately or at a later date. If you want to move your property, you have several options:

  • Sale deed
  • The mortgage
  • Leasing
  • Will
  • A gift deed

Gifts and selling deeds: What’s the difference?

A selling deed exchanges your property for money. The deed states how much money you received for selling your property. Alternatively, Gifting involves surrendering your property without compensation. Non-family members cannot exchange gifts; instead, stamp duty is collected on real estate sales.

Here are a few things to keep in mind

  • Indian law does not recognize gifts between non-family members as legitimate. Hence, it must be assumed that a stranger would be charged a fee by the proprietor. Deeds must be recorded as selling deeds regardless.
  • Gifts can be revoked if the donor proves that they were tricked or coerced into making them. Estates cannot be reclaimed in any other way.
  • As a result of marriage, gifts received as a result of a legacy or inheritance are not taxable.
  • A gift deed is legal as long as the transferor has absolute ownership of the property. In accordance with the terms of the gift deed, a court order should not interfere with the transfer of property.
  • Deeds obtained as wedding gifts, inheritances, or municipal gifts are not taxable. Donations from organizations such as foundations, trusts, or medical institutions are the same.

Tips For Completing A Gift Deed

  • Giving a mobile property as a gift does not require a gift deed.
  • Don’t forget to mention in the grant that you are transferring the gift to the recipient because you care about her.
  • The gift deed should also include a statement explaining why the gift is being given. Whether it is for the benefit of society as a whole or for the benefit of an individual is up to you.
  • In order to register the gift deed, you must confirm that the donee has accepted it.
  • Consult your family members before completing a gift deed. In the future, you’ll be in trouble without them.

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