Gift Deed
A Gift Deed is a legal agreement executed from one individual to another describing a transfer of gift as per the provisions of the law. As prescribed in Section 122 of the Transfer of Property Act, 1822, a Gift Deed format is a legally binding written format by which the donor can transfer any existing immovable or movable assets to the donee voluntarily.
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Gift Deed - Overview
Type of properties that can be gifted
Gift Deed
The properties can be gifted are mentioned below:
- A movable or immovable assets
- A transferable property
- A tangible property
- An existing property
Donor and Donee
- Any individual who is willing to transfer any movable or immovable property is named as a Donor. Furthermore, a donor should be an individual who is not mentally ill and is capable to agree. If the individual is a minor, then the donor is not capable to transfer the property or to enter into this type of contract. Any individual who receives the gift or to whom the transfer is made is known to be a Donee. if in case donee is a minor by age, then the gift would have to be sanctioned by donee’s guardian in the place of the donee. Once the minor attains his/her adulthood, the gift can either accept the gift or return the gift in case of the responsible gift or if the gift is attached with some terms and conditions.
The essential clauses in a Gift Deed
There are certain things that have to be included in a Gift Deed to make it a critical legal document.
- Possession Of Property: It would be better if you were the champ of that property in your possession and the reason to. to give the property. The property should exist during the process of making a gift because you cannot give the property which does not exist or a property you possibly can acquire in the future.
- Clause For Consideration: It must be mentioned in the gift deed sample that there is no transfer of money or any other type of exchange or consideration is involved, and the transferring gift is being done because of love and affection. It will not be conceived as a gift if it is applicable to how small the condition is.
- Clauses For Revocation: It is best to avoid dispute and complications in future; however, it is not compulsory. Both the donor and donee have to correspond and agree on this clause, which needs to be stated, not entailed.
- Details Of The Property: An in-depth description of the property should be included, which may mention the address, structure, location, colour, area, and son.
- Free Consent: The transfer of the property should be free from any unjustified influence, fear, coercion, or threat. The gift should clearly explain that the transferor has a clear purpose of doing so, and the transfer is on the own free will of the Donor.
- Rights And Liabilities: If there are any additional rights or liabilities, it can be attached under this clause and it should be announced in the gift deed. Claims may include- any rights about the further sale or leasing of its subsidiary.
- Details Of Donor And Donee: The relationship between the donor and donee is important to justify, whether they both are blood relatives or not. Some state governments also provide a grant on stamp duty if gifts are done to blood relatives.
- Rights Of Donee: A distinct indicant of Donee rights and responsibilities which is attached as a part of the gift deed property can be sold. This clause includes the donee rights and power to make modifications to the property, to enjoy the asset or property peacefully, and get leases or rents or any profits that come from that gifted property.
- Delivery Clause: A delivery clause that confirms the delivery of the ownership of the property generally states about the activities of the transfer ‘expressly or implied’.
The registration process and the steps involved in the drafting of Gift Deed
Steps Involved In The Drafting Of Gift Deed Are Mentioned Below:-
- Draft a gift deed for cash with the following necessities.
- Mention the date and location for execution
- Details about Donor and Donee such as Name, Date of Birth, Residential
- Address, and Relationship among the donor and donee.
- A complete description of the property
- Two Witnesses are required
- Signatures of the two witnesses of Donor and Donee
- Print those details on the stamp paper with applicable value depending upon each state
- Stamp rate.
- Finally, get the Gift deed registered at the respective registrar/sub-registrar office.
Documents required for Gift Deed registration in India
Once a Gift Deed is signed and attested by all the required witnesses, you have to give the stamp duty and registration fee as prescribed in the respective state regulations. Following are needed documents:
- Aadhar Card of the applicant
- ID Proofs, such as Driver License, Passport, and so on
- PAN card of both the donor and donee for the registration of gift deed india.
- Original Gift Deed which has to be executed
- A documents required for gift deed to prove donor title to the asset
- Two witnesses are required at the time of registration of Gift Deed
- Encumbrance Certificate
- A certificate of Ready Reckoner Value and
- Other Agreements and contracts which you might have entered into regarding Property
- Other documents may require as per the state requirements
- You might require other documents, as this list is not in-depth. You may need to attach documents such as certificates associating to your property's value, as per the state regulations and so on.
The respective stamp duties for registering Gift Deed
Print the stamp paper with all required clauses and conditions and get it registered at the respective registrar office after drafting gift deed rules. The fee needed for stamp duty can be paid either by purchasing stamp paper, or it can be completed through online (e-stamp) in which the fee amount varies from the state by state. For instance, in Tamil Nadu it’s 7% for other relatives and 1% for family members.
The Taxability of gifting a property gift deed through Gift Deed
Where an individual receives a gift from any individual after the 1st day of April 2017 any amount of money, without condition as per the Income Tax Act 1961, Section 56(2)(x), the whole of the total value that exceeds more than Rs.50000 shall be taxable as per the head “Income from other sources.
The given clause shall not apply to the mentioned below persons:-
- Death of donor/payer
- Marriage occasion of the person
- By inheritance or Will
- Of any local authority
- Of any relative
- Of any Institution filed under the section 12A or section 12AA; or Of any Institution mentioned to in clause (23C) of section 10
- From any organization for the advantage of the “relative of the individual”.
- Any institution mentioned to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-
- clause (via) of clause (23C) of section 10; or
- Any deal not regarded as per the clause (i)/20[clause (iv)/clause (v)]/clause (vi)/clause (via)/clause (viaa)/clause (vib) or clause (vic)/clause (vica)/clause (vicb)/clause (vid)/clause (vii) of section 47
Frequently Asked Questions
A Gift Deed is a legal document that describes a transfer of gift under the provisions of the law from one individual to another.
A Gift Deed is rightful only ‘without any consideration’ in return if offered out of love and affection, by one of the family members or by a friend to another individual or friend. It is obligatory and mandatory to have a registered Gift Deed if you want to gift or transfer movable/immovable property as per Section 17 of the Registration Act, 1908.
Gift Deed is a legally adhered written document by which the donor can give or transfer existing movable assets or immovable property to the donee or beneficiary that too of your own free will, as prescribed in Section 122 of the Transfer of Property Act, 1822.
It would be best if you were the titleholder of that immovable property in your possession, 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.
A distinct indication of Donee rights creates an attached part of the Gift Deed. It includes the done rights to make changes to the property, enjoy the property peacefully, and get rents or any profits from that gifted property.
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.
The properties can be gifted can be a movable or immovable property, tangible property, transferable property & an existing property.
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.
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