Gift Deed is a document which is used for voluntary transfer of movable or immovable property by one individual (the donor) to another (the donee) without receiving any money or consideration. In India, a gift deed will be required to adhere to provisions of Transfer of Property Act, 1882 and should be properly stamped and registered to be legally effective, particularly in regard to immovable property.
This blog outlines the significance of the legislative process and offers an example of a gift deed format.
Introduction
Gifting is widespread in Indian culture and is frequently employed to transfer property among family members, between friends, or to charities. A gift deed legitimates this transfer and provides that the donee receives a legal title to the property. In contrast to a will that operates after the testator’s death, a gift deed passes title during the lifetime of the giver and cannot be unilaterally cancelled after execution and registration.
Transfer of property without a registered gift deed can result in legal issues or controversy. Therefore, it is crucial to abide by the proper legal process, including stamp duty and registration under the Indian Registration Act, 1908.
Legal Requirements for a Valid Gift Deed
According to Indian law, specifically the Transfer of Property Act, 1882, a gift deed should satisfy some legal requirements to be valid.
- The gift should be voluntary and without consideration.
- The donor should be of sound mind and legally capable of gifting the property.
- The donee should be capable of receiving the gift.
- The gift should be accepted while the donor is alive.
- For real property, the gift deed has to be registered, and appropriate stamp duty has to be paid according to state rates.
- The deed has to be signed by both parties in the presence of two witnesses at least.
Through these stipulations, the gift is legally binding and can withstand any future challenge or test.
Format of Gift Deed (For Immovable Property)
The structure of a gift deed needs to be formulated very carefully to make sure all the legal aspects are addressed. Here is a detailed and descriptive draft that can be used as a reference:
GIFT DEED
This Deed of Gift is made on this ___ day of _______ 20__ at [City], by and between:
[Name of Donor], aged __ years, son/daughter of [Father’s/Mother’s Name], residing at [Full Address], hereinafter referred to as the “Donor”, which term shall include his/her heirs, legal representatives, executors, and administrators,
AND
[Name of Donee], aged __ years, son/daughter of [Father’s/Mother’s Name], residing at [Full Address], hereinafter referred to as the “Donee”, which term shall include his/her heirs, legal representatives, executors, and administrators.
WHEREAS the Donor is the sole and absolute (Full) owner of the immovable property more particularly described hereunder:
Description of the Property:
[Complete Address, Survey Number, Municipal Number, Area in square feet/meters, Nature of construction (e.g., residential house, land, flat), boundaries, and other identifying details.]
AND WHEREAS the Donor is desirous of transferring the said property to the Donee out of natural love and affection and without any monetary consideration,
NOW THIS DEED WITNESSETH:
- That the Donor voluntarily, without any compulsion or undue influence, hereby gifts the aforementioned immovable property to the Donee, and the Donee has willingly accepted the said gift.
- That the Donee shall henceforth be the sole and absolute owner of the said property and shall enjoy full ownership rights, including the right to use, lease, sell, mortgage, or otherwise deal with the property at his/her discretion.
- The Donor affirms that the gifted property is free from all kinds of encumbrances, mortgages, claims, charges, disputes, liens, or litigation.
- The Donor assures that he/she has full legal right, title, and authority to execute this gift deed and transfer the said property.
- That this gift is made out of love and affection and not in consideration of any payment or future obligation.
- That the Donee has taken symbolic/physical possession of the property as part of this transaction.
- That this deed shall be presented for registration at the office of the Sub-Registrar having jurisdiction over the location of the property.
IN WITNESS WHEREOF, the parties hereto have set their hands to this Deed of Gift on the day, month, and year first above written in the presence of the undersigned witnesses.
[Signature]
(Name of Donor)
[Signature]
(Name of Donee)
Witnesses:
- Name: ___________________
- Address: ___________________
- Signature: ___________________
- Name: ___________________
- Address: ___________________
- Signature: ___________________
Execution and Registration of the Gift Deed
Once the gift deed is prepared, the second step is to get it printed on non-judicial stamp paper of the requisite value, which differs according to the state and type of property. In the case of immovable property, stamp duty is required and can be different based on whether the gift is being given to a family member or a third party.
After preparation of the stamp paper, the parties then have to visit the Sub-Registrar of Assurances, producing identity proof and supporting documents. The parties and witnesses sign the deed before the registering officer. Once registered successfully, the gift becomes valid and enforceable as per law.
Conclusion
A gift deed is not just a document; it’s a lawful guarantee that protects the interests of both the donee and the donor. Whether you’re giving property to a family member or passing an asset to a trust or institution, employing a duly drafted, registered gift deed is necessary to ensure that the transfer is valid and controversy-free.
Knowing the format and legal aspects of a gift deed avoids confusion and delay at the time of registration. It also provides peace of mind to both parties, understanding that the transfer is on record and legally binding. In the event of doubt, seeking advice from a capable professional assures your gift is made in the right manner, with all the formalities followed.
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