Gift Deed: Meaning, Registration, Charges, Documents, And More

Different Types of Properties That Can Be Gifted

A Gift Deed can be needed to transfer many types of properties. Broadly, these can be categorized as:

1. Movable Property

• Assets that can be moved from one location to another without affecting their integrity.
• Examples: Jewelry, vehicles, shares, cash.

2. Immovable Property

• Assets attached to the land, making them immovable.
• Examples: Real estate, land, buildings.

Step-by-Step Guide to Registering a Gift Deed

To ensure that a Gift Deed is legally valid and enforceable, it must be registered. Here’s how the process typically works:

1. Preparation of Necessary Documents

• Title deed or proof of ownership for the asset/property.
• Identity proofs of both donor and donee (Aadhar card, passport, voter ID).
• Encumbrance certificate indicating the property is free from legal disputes.
• Sale deed copy, if applicable.
• Proof of identity for two witnesses who will attest to the deed.

2. Visiting the Local Sub-Registrar Office:

• Both the donor and donee, along with witnesses, must visit the sub-registrar office to submit the deed.
• The document is verified, signed by both parties and witnessed.

3. Verification and Attestation:

4. Payment of Stamp Duty and Registration Fees:

• Stamp duty and Gift Deed registration fees must be paid, varying by state.
• Failure to pay can render the deed invalid.

Charges Involved in Registering a Gift Deed

Gift deed registration charges mainly include:

Stamp Duty:

• Stamp duty on gift deeds is determined by the state in which the property is located.
• Calculated based on the property’s market value.
• Some states offer reduced rates for transfers between close family members.

Registration Fees:

• Typically, a percentage of the property’s value.
• Fees also vary from state to state.

Advantages of Using a Gift Deed

Understanding the benefits can help in deciding if a Gift Deed is the right option for transferring assets:

Legal Recognition:

• Provides a documented, legal acknowledgment of the property transfer, protecting all parties.
• Eliminates ambiguity and disputes over ownership.

Tax Benefits:

• In certain cases, gift deeds may attract exemptions or reduced tax rates, especially when done within the family.
• Tax-efficient way of transferring assets compared to other forms of property transfer.

Estate Planning:

• Allows property owners to pass on their assets according to their wishes, facilitating smoother estate management.
• Helps in succession planning, ensuring beneficiaries receive assets without legal hurdles.

Avoiding Future Disputes

• Legal documentation prevents disputes or claims over the gifted property.
• A clear indication of the donor’s intent to gift the asset.

Legal Requirements for a Valid Gift Deed

These are the Gift Deed rules to consider:

1. Voluntary Transfer
The donor must willingly transfer the property without coercion or undue pressure.

2. Acceptance by Donee
The donee must accept the gift; otherwise, the deed is nullified.

3. No Monetary Exchange
There should be no payment involved; otherwise, the transaction is treated as a sale.

4. Registration

• Legal Gift Deed registration at the sub-registrar office is crucial.
• Stamp duty and registration charges must be paid as per local laws.

Essential Documents Required for Registration

The following documents are typically required to register a property Gift Deed:

Proof of Ownership
Legal documents that confirm the donor owns the property being gifted.

Identity Proofs
Valid ID documents of both the donor and donee, such as passports, Aadhar cards, or voter IDs.

Encumbrance Certificate
Ensures the property is free from any legal claims or debts.

Sale Deed (if applicable)
If the property was acquired through a sale, a copy of the sale deed should be presented.

How Can a Gift Deed Be Revoked?

Revocation of Gift Deed is generally challenging but possible under certain conditions defined under Section 126 of the Transfer of Property Act, 1882:

1. Mutual Agreement
The donor and donee can revoke the deed if both agree.

2. Unwilling Donee
If the donee initially accepted the gift under duress or hesitation, the deed can be revoked.

3. Fraud or Illicit Conditions
If it is proven that the deed was based on fraud or conditions deemed illicit, it can be annulled.

Tips for Preparing a Gift Deed

Include a Revocation Clause
This clause can save potential future complications by allowing for the deed’s revocation if required.

Consult Legal Experts
Consider seeking legal advice to ensure the deed is drafted and executed according to all legal requirements.

Check State Laws for Stamp Duty
Since rules and charges vary across states, verify local laws to avoid complications.

Conclusion

While gift deeds offer an effortless avenue for passing along possessions or resources, properly completing the legitimate paperwork is crucial for validating such a transfer. Whether one is arranging their estate or generously gifting wealth, adhering to procedures secures the action.

Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim /disown any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.