GIFT DEED
Registration Of Gift Deed In Delhi
The Registration Act of 1908 which governs deeds in Delhi, mentions that registration of gift deeds is compulsory.
• The property which is to be gifted has got to be valued by an approved Valuer.
• Stamp duty and transfer duty shall be 4% of the worth of the property if the donee may be a woman and 6% if the donee may be a man.
• Registration fees shall be 1% of the entire value + Rs.100/- as pasting charges.
Applications for registration must be done at the concerned Sub Registrar office of the district. the standard reaction time is around 15 days.
Documents required for Gift Deed registrations
After ensuring that your Gift Deed is signed, attested by witnesses and you’ve got paid the stamp tax and registration charges as per your state regulations. you would like to hold a couple of other documents like –
• Original Gift Deed
• ID Proofs, like Driver License, Passport, etc
• PAN Card
• Aadhar Card
• A document like Sale deed to prove donor title to the Property
• Other Agreements which you would possibly have entered into in reference to property
The list isn’t exhaustive, you would possibly need other documents like certificates concerning the worth of your property counting on your state.
What type of properties can be gifted?
Following properties can be gifted:
- A movable or immovable property
- An existing property
- A transferable property
- A tangible property
“If you plan to gift some property to a charity or NGO, you might not be required to pay any stamp duty depending upon your state. But, legal consultation is highly advised in such cases, because not all NGOs are allowed to accept gifts.
There are some benefits that can be attributed to the Gift Deed. Since gifts are made during the lifetime of the donor, they are beneficial if you want someone specific to look after your properties or maybe if you need to help someone, you can transfer your property as a gift. Also, if there is a good chance that legal troubles could gather around the property, some people make a Gift Deed and avoid such litigations.
Can a present Deed be revoked/canceled?
A gift once made and registered with due process of law of law can’t be revoked. After the acceptance, it becomes the property of the donee. The donor cannot independently revoke the deed. Also, during a deed where the parties have agreed that the deed shall be revocable partially or whole, by the mere will of the donor, isn’t a legitimate Gift Deed.
However, under Section 126 of the Transfer of Property Act, 1882 there are certain grounds when gifts are often revoked. The revocation in itself incorporates the cancellation of the Gift Deed and therefore the possession of the property is returned to the donor. The grounds are –
• If there’s an agreement between the donor and donee, that if certain specified events happen or don’t happen, the gift shall be revoked. the purpose to notice here is that the occurrence of such an occasion shouldn’t be controlled by the donor. And both parties must have agreed to such a condition in terms of the Gift Deed.
• The conditions stipulated shouldn’t be immoral, illegal or reprehensible to the property.
• In case of Thakur Raghunathjee Maharaj v. Ramesh Chandra, Hon’ble Supreme Court state that “even though a condition isn’t laid down within the Gift Deed itself, and has been provided under a mutual agreement separately but forms a part of the transaction of the gift, the condition would be valid and enforceable”.
• Another instance, when a present are often revoked is, if they violate Section 19 of the Indian Contract Act, 1872 which says “Where consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement may be a contract voidable at the choice of the party whose consent was so obtained”.
So if the gift was made by obtaining consent on the above grounds it are often revoked. And just in case , the donor dies, his heirs have the proper to file for revocation of the deed.
How to register the Gift Deed in India? what’s the stamp tax in each state at the time of executing a present Deed?
After you’ve got drafted the Gift Deed, print it on stamp paper of appropriate value and obtain it registered at the registrar office. stamp tax that you simply got to pay varies state by state and may be paid either by buying stamp paper of such value or it are often done online.
Below are applicable stamp tax and Charges in some major states:
| STATE | STAMP DUTY |
| Delhi | For Women 4% and Man 6% of the market value of the property. |
| Uttar Pradesh | 6% for Women and 7% for Man of the total value of the property |
| Karnataka | If the transfer is to non-family members it is 5.6% of the land value and in case of family members, it can range from 1000/- to 5000/- depending upon the property location. |
| Maharashtra | Family members – 3%
Other Relatives – 5% If Agricultural land or residential property is gifted then it is Rs.200 |
| Gujarat | 4.9% of Market Value |
| West Bengal | 0.5% if transferred to family members and 6% in other cases.1% surcharge above 40lac. |
| Punjab | None in case of a blood relative or else 6% of property value. |
| Tamil Nadu | 1% for family members and 7% for other relatives |
| Rajasthan | Male -5%
Female- 4% and 3% in case of SC/ST or BPL None for Widow 1% if it is in favor of wife or daughter 2.5% in case close family members like son, daughter, in-laws, father, mother, grandson or granddaughter. |
What are the tax implications of gifting a property?
Under tax Act 1961, Section 56(2)(x), where a person receives from a person after the first day of April 2017 any sum of cash , inconsiderately , the mixture value of which exceeds fifty thousand rupees, the entire of the mixture value of such sum shall be taxable under the top “Income from other sources”. The given clause shall not apply to the subsequent persons mentioned underneath:-
1. from any relative; or
2. on the occasion of the wedding of the individual; or
3. under a will or by way of inheritance; or
4. in contemplation of death of the payer or donor, because the case may be; or
5. from any agency
6. from any fund or foundation or university or other institution or hospital or other clinic or any trust or institution mentioned in clause (23C) of section 10; or
7. from or by any trust or institution registered under section 12A or section 12AA; or
8. by any fund or trust or institution or any university or other institution or any hospital or other clinic mentioned in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or
9. by way of transaction not considered transfer under clause (i) or 20[clause (iv) or clause (v) or] clause (vi) or clause (via) or clause (viaa) or clause (vib) or clause (vic) or clause (vica) or clause (vicb) or clause (vid) or clause (vii) of section 47; or
10. from a private by a trust created or established solely for the advantage of the relative of the individual.
Frequently Asked Questions
Is registration of Gift Deed compulsory?
Yes, the registration with the sub-registrar is mandated for the gift involving immovable property under section 123 of Transfer of Property Act, 1882 and Section 17 of the Registration Act, 1908
Can a minor be the donee?
A minor can be donee, provided that the gift transferred to a minor shall be accepted on his behalf by his legal guardian. It must be accepted during the lifetime of the donor, otherwise, it would be rendered invalid under the property laws in India. If the Gift Deed is attached with some conditions, then the minor after attaining the age of majority, can either accept or return the gift.
How is a gift different from a sales deed?
Both deeds act as an instrument for transfer of property. The only difference lies in terms of consideration. In sale deed, the property is transferred in exchange for consideration of some value but in the Gift Deed, the transferor takes nothing.
Is there an exchange of money involved in the Gift Deed?
There is no exchange of money involved in the Gift Deed. As soon as there is an exchange of something or any sort of other consideration with a value, it shall not be considered as a valid Gift Deed.
Can Gift Deed be challenged in court?
Yes, a Gift Deed can be challenged if the deed was made under threat, coercion, fear or against the will of the donor.
Can Gift Deed property be sold?
Yes, the property received under Gift Deed can be sold. Provided, that you have received the property under registered Gift Deed without any condition attached.
Who can challenge a registered Gift Deed?
Donor and Donee both can challenge the gift. In case, of the demise of either party, their legal heirs can take legal actions.
How to revoke a Gift Deed?
In the case of the unregistered Gift Deed, it can be easily revoked as it holds no validity. However, in the case of the registered Gift Deed, donor and donee both need to acquiesce for revocation. But, if the Gift Deed has been obtained by fraud or illegally it can be challenged under the court of law.
What if you want to gift your property after your demise?
If you want to gift your property after your demise, you need to make a Gift Deed during your lifetime. Now, the general rule is that gifts must be accepted by the donee during the lifetime of the donor. But, the Hon’ble Courts of India have clearly mentioned, that if the Gift Deed is registered after the death of the donor, it still holds valid. The requirement under Section 123 of Transfer of Property Act, is only that the donor has signed the instrument, it is not necessary for the donor to get it registered. It can be registered by the legal representatives of donor or donee.
What if the donee does not accept the gift?
If the donee doesn’t accept the gift, the donor cannot force the recipient to accept the same. The deed shall stand invalid unless the donee records the acceptance.
Can the donor claim back the gifted property?
No, once the Property has been transferred through the registered Gift Deed, the donor cannot claim back the property unless the donor proves that the Gift Deed was made under threat, coercion, undue influence or against the will.
Is Gift Deed a legal document?
Yes, the Gift Deed is a legal proof of property transfer from the donor to the donee.
Is there a tax implication on the Gift Deeds?
If the total amount/value of the deed does not exceed Rs 50,000 in a year, it is exempted from tax.
Does the donee have to pay stamp duty after receiving the Gift Deed?
Yes, as per property transfer laws, the donee becomes liable to pay pending dues such as electricity bills, maintenance, etc.
What are the Pros and Cons of Gift Deed over Will
