Property Transfer through Gift Deeds in India: Process and Requirements

What is a Gift Deed?

A gift deed is a legal document used to transfer ownership of property (like a house, land, or other valuable items) from one person to another as a gift. The person giving the gift is called the donor and the person receiving the gift is called the donee. Unlike a will, which only takes effect after someone dies, a gift deed transfers ownership of the property immediately after it is signed and registered. A gift deed helps avoid disputes over inheritance by clearly showing the donor's intention to give away their property as a gift during their lifetime.

How To Draft a Gift Deed?

• Get stamp paper of the required value from the government office after paying the stamp duty fees.
• At the top, clearly write the place and date when the gift deed is being made.
• Write the full names, addresses, and other details of the two people involved - the donor and the donee.
• Describe the property being gifted in detail - what it is, where it's located, survey numbers etc. so it can be easily identified.
• Have two other people sign as witnesses on the deed.
• Both the donor and the donee should then sign the gift deed.

Gift Deed Format

Here are some of the essential things that should be mentioned in the gift deed format:

• Date and place where the gift deed is being made.
• Full name, address, date of birth, and signature of the donor and donee.
• Clear and complete details about the property being gifted - what it is, where it is located, survey numbers, etc.
• Names and signatures of two witnesses who are present when the gift deed is being made.

After paying the required gift deed stamp duty fees, the gift deed must be printed on stamp paper. Once printed, the gift deed needs to be registered at the local registration office to make it legally valid.

Gift Deed Registration

For a gift deed to be legally valid, it must be registered as per the Transfer of Property Act 1882. Registration makes the gift deed an enforceable document. For movable gifts like jewelry or cars, the deed is registered at the registrar's office where the donor lives. Immovable gifts like land or houses are registered at the sub-registrar's office in the area where the property is located. 

Read More: Transfer of Property Ownership in India: Rights and Responsibilities

Documents and Stamp Duty for Gift Deed

To register a gift deed, you need to have certain documents ready:

• The original gift deed document itself
• ID proofs like an Aadhaar card, driving license, and PAN card - for the donor, donee, and two witnesses
• Proof that the giver actually owns the gifted property, like a sale deed
• Passport size photos
• Address proof for the two witnesses

You also need to pay stamp duty fees to the government for registering. The gift deed registration charges differ across states.

Legal Aspects and Requirements

To comprehend the process, let's explore the essential legal aspects and requirements associated with property transfer through all types of gift deeds.

• Voluntary Transfer: The transfer of property through a gift deed must be voluntary, meaning it should be done willingly, without any form of coercion or pressure.
• Acceptance: The recipient of the gifted property must willingly accept the gift. Acceptance can be either expressed or implied.
• Registered Gift Deed: A gift deed must be executed on non-judicial stamp paper and registered at the office of the Sub-Registrar of Assurances within the jurisdiction where the property is situated. The registration ensures the legality and authenticity of the transfer.
• Documented Process: The gift deed should be executed in writing and signed by both the donor (the person giving the gift) and the donee (the person receiving the gift). It should include the details of the property, the names of the parties involved, their relationship, and other necessary information.
• Consideration: Unlike other property transactions, gift deeds do not involve monetary consideration. The transfer is based on love, affection, and the desire to gift the property without any financial exchange.
• Tax Implications: It is important to note that the transfer of property in India through a gift deed may have tax implications, including potential tax liabilities for both the donor and the donee. It is advisable to consult with a tax professional to understand the applicable tax laws and implications.

Step-By-Step Process of Property Transfer Through Gift Deeds

Gift deeds property transfer has step by step process for property transfer which needs to be followed. Let's explore them in detail:

1. Drafting the Gift Deed

The first step involves drafting the gift deed, which should be prepared by a legal expert to ensure its validity and compliance with legal requirements. 

2. Execution and Registration

Once the gift deed is drafted, it will be executed by the donee and then doner. Both parties must sign the document in the presence of at least two witnesses. 

3. Transfer of Ownership

Upon registration, the property owner is legally transferred from the donor to the donee. The donee becomes the rightful owner of the gifted property, and the donor no longer retains any ownership rights.

The Final Word

Property transfer through gift deeds is a legal and viable option for individuals in India who wish to transfer property as a gift. It involves a voluntary transfer of ownership, documented through a registered gift deed. The process requires drafting the deed, executing it, and registering it at the Sub-Registrar of Assurances office. It is crucial to adhere to the legal requirements and consult legal experts to ensure a smooth and lawful property transfer.