Introduction
Gift Deed in India: A gift of property is the transfer of ownership of property by one person to another through a gift deed. Gifting a property to a loved one through a gift deed has some financial implications that you need to consider first.
Table of Contents
- What is a Gift Deed in India?
- How to Draft a Gift Deed
- Gift-Deed Rules
- Parts of Property Gift-Deed
- Neither Money nor Power Is Involved
- You Are the Owner of Your Property When You Gift It
- Relationship Between the Donor and the Donee
- Disadvantages of Property Gift Deed
- Can a Gift Deed Be Canceled By Agreement?
What is a Gift Deed in India?
A gift deed in India is a contract used when one person wishes to gift his property or money to another. A movable or immovable property can be voluntarily gifted from a donor to a donee using a gift deed. A gift deed allows the property owner to gift the property to someone.
Avoids future disputes arising out of inheritance or inheritance claims. A registered gift deed also saves a gift deed because, unlike in the case of a testament, the transfer of property takes place immediately. You do not need to go to court for the execution of the gift deed.
How to Draft a Gift Deed
In India, a “gift deed” is a legal instrument used for transferring ownership of property from one person (the “donor”) to another (the “donee”) without any monetary consideration. Here are the key points about gift deeds:
- Purpose: A gift deed allows the voluntary transfer of immovable or movable property as a gift. It is governed by the Transfer of Property Act of 1882.
- Donor and Donee: The donor is the person gifting the property, while the donee is the recipient. The gift deed should mention their names, addresses, and relationships.
- Voluntary Transfer: The donor must freely and willingly transfer ownership without any fear, coercion, or threat.
- Property Details: The gift deed should specify detailed information about the property being gifted.
- Consideration: Unlike a sale deed, a gift deed does not involve any exchange of money. It is based on love and affection for the donee.
- Acceptance: The donor must accept the gift during the donor’s lifetime for the deed to be legally valid.
- Registration: For immovable property, registration of the gift deed with the appropriate registrar or sub-registrar is mandatory. Movable property can be gifted either through registration or by delivery of the property.
- Donor’s rights: The gift deed should outline the rights of the donee, including the right to enjoy the property peacefully and sell, mortgage, or lease it.
- Witnesses: The deed should be signed and attested by at least two witnesses.
Thereafter, the gift deed should be stamped on stamp paper after payment of the required amount, depending on the value fixed by the state Government. The gift deed should be registered in the office of the Registrar or Sub-Registrar.
Gift-Deed Rules
Before gifting a property through a gift deed, you should prepare the documents accordingly, knowing the following points:
- Good Health Conditions: The donor should be in good mental and physical health while executing the gift deed. So that the gift deed is transferred intentionally and not by force.
- Unencumbered: The property planned to be gifted should be free from any encumbrances, such as legal disputes, mortgages, or liens. The donor should verify this by conducting a full title search. The gift should only proceed with the execution of the deed.
Parts of Property Gift-Deed
When creating a gift deed, it’s important to include the name of the donor and the recipient, as well as the date of the gift. You should also include a detailed description of the gift, including any special conditions or restrictions that may apply. It’s a good idea to have the gift deed notarized to ensure its legal validity.
Additionally, both the donor and recipient should sign the gift deed in the presence of witnesses. Finally, it’s important to consult with a legal professional to ensure that the gift deed complies with all relevant laws and regulations. Here are some important things to mention in the gift deed format.
Neither Money Nor Power Is Involved
While preparing a gift deed, it is important to include a consideration clause that clearly states that there is no exchange of money in the gift. It is important to indicate that the gift is done purely out of love and affection and not due to any monetary transaction or coercion. This ensures that the gift is considered a genuine act of charity and is not viewed as transactional or coercive.
By including this consideration clause in the gift deed, all parties involved can be assured that the document accurately reflects the true nature of the gift. This helps prevent any future legal disputes or misunderstandings arising from any misinterpretations of the intentions behind the gift. Ultimately, adding this clause helps protect both the gift giver and the recipient. Ensuring that the gift is truly a happy and meaningful gesture of goodwill.
You Are the Owner of Your Property When You Gift It
It is important to note that only the owner or title holder of the property has the legal right to gift it to someone else. If you are not the owner, you cannot gift the property, even if you expect to do so.
Relationship Between the Donor and the Donee
‘Relationship’ is often used where the relationship’ is useful, as in the relationship between inflation. However, the preferred use of relationships should refer to human relations or relatedness.
However, the preferred use of ‘relationship’ should be human relationships or related situations. Must have a state of interpersonal connection (especially an emotional connection).
Disadvantages of Property Gift Deed
● Irrevocable: Once executed, it is very difficult to revoke a gift deed unless there is strong evidence of its necessity. A decision should be taken before executing the gift deed, as this is not possible to change of mind etc.
● No control over property: Once the gift deed is executed, the donor has no control over the gifted property as he has full power.
● May be misused: A system set up to avoid payment of taxes may be misused by a person who completes it.
Can a Gift Deed Be Canceled By Agreement?
If the condition is not fulfilled and is not part of the gift deed, the gift deed can be canceled by mutual agreement. A separate mutual agreement is part of the gift transaction.
However, remember that a gift deed cannot be revoked unless it is based on misunderstanding or fraud. A person cannot revoke a gift deed unilaterally. It should be challenged in court. If anyone wants to challenge the gift deed, it can be executed by the donor. It must be proved that it was affected by fraudulent practices.
Conclusion
Once a property is legally gifted, it is complete and cannot be easily revoked. However, under Section 126 of the Transfer of Property Act of 1882, cancellation of a gift deed may be allowed under certain circumstances. First, if you are making a gift deed, think carefully and make a decision later. For more information like this, you can visit our Openplot.