Gift Deed: Registration, Property Deed format, Stamp duty & More

A gift deed is a legal document used to formally transfer ownership of property (movable or immovable) from one person (donor) to another (donee) as a gift. It avoids future disputes arising from inheritance claims and serves as immediate proof of ownership transfer, unlike a will.

Here’s a breakdown of essential points regarding gift deeds:

1. What can be gifted through a gift deed?

• Movable property (e.g., vehicles, jewelry)
• Immovable property (e.g., land, buildings)
• Any existing transferable property

2. How to create a gift deed?

1. Details: Include the place, date, donor, and donee information (names, addresses, relationships, dates of birth, signatures).
2. Property Description: Specify details like structure, type, address, area, location, etc. of the property.
3. Witness Signatures: Two witnesses must sign to verify the deed’s execution.
4. Stamp Duty and Registration: The deed needs to be printed on stamp paper (value determined by the state government) and registered at the registrar’s office.

3. Important Considerations Before Gifting:

• Donor’s Mental State: The donor must be of sound mind and body while executing the deed.
• Encumbrance-Free Property: The property should be free of legal disputes, mortgages, or liens.

4. Key Clauses in a Gift Deed:

• No Monetary Exchange: The deed should explicitly state that the gift is given freely without any money involved.
• Donor as Owner: Only the legal owner can gift the property.
• Relationship Disclosure: Mentioning the donor-donee relationship can influence stamp duty charges in some states.
• Rights and Liabilities: Specify any limitations on the donee’s ability to sell or lease the property.
• Delivery Clause: Mention the transfer of possession of the property.
• Revocation Clause (Optional): Include a clause allowing the donor to take back the gift under specific circumstances (with the donee’s agreement).
• Maintenance Clause (Recommended): For parents gifting property, consider adding a clause ensuring their care by the donee.

5. Disadvantages of Gift Deeds:

• Irrevocable: Generally difficult to revoke unless under exceptional circumstances.
• Loss of Control: Once gifted, the donor relinquishes control over the property.
• Potential Misuse: Donees might exploit the system to avoid taxes.

6. Gift Deed Registration:

Mandatory registration under the Transfer of Property Act, of 1882, for the deed to be valid.

Documents Required for Registration:

• Original gift deed
• ID proofs (donor, donee, witnesses)
• PAN cards (donor, donee)
• Property sale deed
• Other relevant property documents.

Tax Implications:

• Gift deeds exceeding Rs. 50,000 in stamp duty value may incur income tax for the donee.

Tax Exemptions:

• Gifts from relatives, for marriage, under a will, or to charitable institutions are exempt from tax.

Alternatives for Gifting After Death:

• Use a will to transfer property after your passing.

Non-Acceptance of Gift Deed:

• The gift becomes void if the donee doesn’t accept the deed while the donor is alive.

Revoking a Gift Deed:

• Challenging in court, with limited grounds for revocation (coercion, fraud, immoral grounds, pre-agreed upon conditions).

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