GIFT DEED
WHAT IS GIFT DEED ?
A Gift Deed is the document through which a person voluntarily gifts a movable/immovable property to a person. A Gift Deed minimizes the chances of disputes in property inheritance cases. The registration of a Gift Deed involves charges set by the state government. The article to be gifted can be a movable or immovable property. A gift deed is a valuable document in succession matters as it differs from a valid 'Will' made by the property owner.Unlike a Will, the Gift Deed is immediately executable, and one does not require a court to get it enforced. Hence, a Gift Deed saves time compared to a settlement through a will. Under a Gift Deed, the person gifting the property is called a Donor, and the receiver is called "Donee".
Gift Deed Under The Transfer Of Property Act
The Transfer of Property Act 1882 covers the Gift Deed. The Act specifies that the Gift must be given without any monetary consideration. In addition to this, the Donee must accept the Gift within the lifetime of the Donor.Under the Transfer of Property Act, the Gift Deed becomes effective only after its registration with the Registrar or Sub-registrar's office. After the registration of the Gift Deed, the transfer of property is immediate.The Transfer of Property Act clearly mentions the validity of the Gift Deed.
― According to the Act ―
The property mentioned in the Gift Deed must exist when making the Gift.
The Donee must accept the Gifted property.
The Gift must be voluntary and without coercion.
The Gift must not involve monetary/otherwise consideration.
The Donor of the concerned property must be the lawful owner with a clear title.
Clauses & Essential Details
Components Of Gift Deed
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The Gift Deed must explicitly mention that the transfer of the Gifted property is being done of the Donor's free will, and he/she is not under any pressure/threat to gift the property.
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The Gift Deed must contain the name, address, and relationship of the Donor and Donee.
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The Gift Deed must explicitly mention that the Donor is gifting the property out of love towards the Donee and will not take any monetary consideration in exchange.
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The Gift Deed must contain the dimensions, plan, and area details of the property in question so that there remains no ambiguity later.
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The Gift Deed must mention the property rights of the Donee. The gift deed clearly explains that the Donee can sell, lease, or rent the property as per his/her will. The Donee can also mortgage the property.
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As the execution of a Gift Deed requires the presence of two witnesses, the Gift Deed must mention the name and address of the witnesses. A valid Gift deed must be signed and attested by two witnesses.
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It is advisable not to have a revocation clause in the Gift Deed as voluntary, and the ownership gets transferred to the Donee once the deed is executed.
The place and date should be mentioned at the top on which the gift deed is to be executed.
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Both parties should mention all relevant information like address, name, date of birth and signature.
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Mention the complete details of the property for which a deed is being done.
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A gift deed should have two witnesses and their signatures.
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A gift deed should be printed on stamp paper once the amount is paid. Once that is done, it should be registered at the registrar's or sub-registrar's office.
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Ensuring Legally Binding Gift
Gift Deed Registration
According to the transfer of property Act 1882, a gift Deed is valid only if registered. The registration of a Gift Deed includes the donor's signature and the donee and attestation by two witnesses (mandatory). In fact, the Gift Deed will be enforceable only if it is registered with the registrar's office.The registration of a gift deed involves the enumeration of the essential clauses on a stamp paper and payment of the requisite stamp duty. The value of the stamp duty varies from state to state. It must be noted that if the gifted asset is movable, the jurisdiction of the registrar's office will be according to the place of residence of the donor.
Documents Required For Gift Deed Registration
Gift deed registration is done at the Registrar/Sub-registrar’s office. However, to register a Gift Deed, important identity documents and property documents are required, such as ―
Original Gift Deed
ID Proof like Aadhar Card, Driving License among others.
PAN Card of the donor and donee.
Passport size photograph.
Address proof of witnesses.
Document such as a sale deed or Title Deed to prove the ownership of the donor.
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