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Gift Deed Registration

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 Registration in India

Gifting property has deep cultural and historical roots in India, where passing down wealth, especially within families, has been a long-standing tradition. In ancient times, property was often given as gifts during religious ceremonies, weddings, or as acts of goodwill. They were recorded orally or on palm manuscripts. Over time, as societies evolved and property rights became more structured, the need for formal documentation emerged. Today, under Indian law, a gift deed is the official method to transfer ownership of movable or immovable property without any monetary exchange. It reflects a voluntary and irrevocable transfer from one person (donor) to another (donee) and must be registered under the Registration Act, 1908, to be legally valid. This modern process of registering a gift deed ensures transparency, avoids future disputes, and provides legal protection to both parties.

What is a Gift Deed?

A gift deed is a legally binding document used to voluntarily transfer ownership of property from one person (the donor) to another (the donee) without any consideration. Under Section 122 of the Transfer of Property Act, 1882, a gift deed must be registered to have legal enforceability.

Parties in a Gift Deed

A valid gift requires mainly two parties:

1. Donor

The donor is the individual who voluntarily transfers ownership of property to another person without any consideration in return. The donor must be:

Major, i.e., 18 years or older
Of sound mind
Hold legal ownership of the property being gifted
execute the gift out of free will, without coercion, fraud, or undue influence

2. Donee

The donee is the person, group of persons, or an organization or entity who receives the gift. The done can be a person of any age, i.e., a done can be a minor or a person of unsound mind. If the donee is a minor, their legal guardian must accept the gift on their behalf.

Witnesses in a Gift Deed

In addition to the donor and donee, the execution of a gift deed must also be attested by at least two witnesses, who are major in age and of sound mind.

These witnesses are required to:

Be present at the time of execution and registration
Sign the deed to confirm they have witnessed the transaction
Provide valid identification proof at the Sub-Registrar Office

Types of Properties That Can Be Gifted

Movable property (e.g., vehicles, jewelry)
Immovable property (e.g., land, house, apartment)
Tangible or intangible assets (e.g., copyrights, patents)

What Makes a Gift Deed Valid in India?

A gift deed must meet the following conditions:

There must be a transfer of ownership of a gift from a donor to the donee.
The transfer must be voluntary, with no force or coercion involved.
The donor must have full ownership and the intention to gift.
The gift must be transferred without consideration. There should be no money or compensation exchange for the gift.
The donee must accept the gift during the lifetime of the donor.
The gift deed must be executed and registered as per law

Why is Registration of a Gift Deed Necessary?

In India, a gift deed is necessary due to the following reasons:

Legal validity and enforceability: Section 123 of the Transfer of Property Act, 1882 mandates that the transfer of immoveable property by way of gift must be effected through a registered deed, signed by or on behalf of the donor, and attested by at least two witnesses. Furthermore, section 17 of the Registration Act, 1908 mandates that the documents affecting the transfer of an immovable property must be legally valid to be registered.
Prevents future disputes or claims: Registering a gift deed under Section 17 of the Registration Act, 1908, provides a legally recognized record of the property transfer. Registration serves as official evidence of the donor's intention and the donee's acceptance, and it minimizes the risk of potential disputes or claims over the property or gift being transferred.
Acts as legal proof of ownership transfer: A registered gift deed serves as conclusive evidence of the transfer of ownership from the donor to the donee.
Required for mutation in revenue records: A registered gift deed is a prerequisite for initiating mutation proceedings, as it provides the necessary legal proof of transfer.
Assists in property tax and inheritance matters: A registered gift deed helps in the accurate assessment of property tax in India.

Tax Implications of a Gift Deed in India

Type of Gift	Tax Implications as per the Income Tax Act, 1961
Gifts from Relatives	Fully exempt from tax under Section 56(2)(x). 'Relatives' include spouse, siblings, lineal ascendants or descendants, and specified in-laws.
Gifts from non-relatives less than ₹50,000/year	Exempt from tax if the aggregate value of gifts received in a financial year does not exceed ₹50,000.
Gifts from non-relatives of more than ₹50,000/year	The entire amount becomes taxable under Section 56(2)(x) as 'Income from Other Sources' if the aggregate value exceeds ₹50,000 in a financial year.
Gifts Received on Marriage	Exempt from tax, regardless of the amount or donor, as per the proviso to Section 56(2)(x).
Gifts Received Under a Will or Inheritance	Fully exempt from tax under the proviso to Section 56(2)(x).
Gifts of Immovable Property from the Donor's Perspective	Not considered a 'transfer' under Section 47(iii); hence, no capital gains tax is levied on the donor.
Gifts of Immovable Property (Donee's Perspective)	Upon sale, the donee is liable for capital gains tax. The cost of acquisition and holding period are determined as per Section 49(1) and Section 49(4), considering the previous owner's details.
Gifts to Charitable or Religious Trusts	Generally, exempt, provided the trust is registered under Section 12A/12AA and complies with other conditions specified in the Income-tax Act.

Documents Required for Gift Deed Registration

Drafted gift deed (printed on stamp paper)
Provide proof of identity of donor and donee (Aadhar, PAN, passport, etc.)
Property documents such as a registry of property, previous sale deed, property tax receipts, etc.
Passport-size photos of the donor and donee
Two witnesses with ID proofs
Encumbrance certificate in case of immovable property
NOC from housing society (if applicable)
Recent electricity or water bill

Step-by-Step Procedure for Gift Deed Registration

Steps Involved In The Drafting Of Gift Deed Are Mentioned Below:-

Step 1: Draft the Gift Deed

A gift deed must contain the following:

Full details of the donor and donee
Relationship between the two parties
Complete and accurate property description
Declaration of voluntary transfer without consideration
Acceptance clause by donee
Signatures of both parties and two witnesses

Step 2: Evaluate Stamp Duty

Stamp duty is payable based on the market value of the property. It varies from state to state.

Step 3: Pay Stamp Duty and Registration Charges

Stamp duty and registration charges can be paid through government-authorized payment portals or physically at the Sub-Registrar Office.

Step 4: Visit the Sub-Registrar's Office

Both donor and donee must:

Visit the jurisdictional Sub-Registrar Office
Carry all documents (original and photocopies)
Be accompanied by two witnesses
Carry identification documents

Step 5: Execution and Registration

The document is signed and thumb-printed by both parties and witnesses in the presence of the Sub-Registrar’s office.
The Sub-Registrar will review all paperwork.
Once everything is done, the gift deed is registered, and a receipt is provided

Revocation or Cancellation of Gift Deed

A gift once registered is generally irrevocable. However, it can be revoked if:

There’s a mutual agreement with conditions for revocation
The gift was made under coercion, fraud, or undue influence
The legal process must be followed through the civil court of the appropriate jurisdiction.

Gift deed registration is not just a statutory requirement under Indian law, but also a safeguard for both the donor and the donee. It formalizes the intention behind the gift, protects ownership rights, and supports smooth property mutation. Individuals should never rely on verbal promises or unregistered documents whenever gifting valuable assets. By following the correct legal procedure, the parties can ensure that the transfer of property by way of gift is legally valid, legally recognized, and dispute-free.