Introduction
There are as many types of real estate transactions as there are properties. Every real estate transaction differs from another in terms of the property in question and how it is being transferred between the parties. One of the most popular ways to transfer immovable property is through a gift deed. In case you don’t know, a gift deed is an agreement that allows one person to gift his property or money to another.
Table of Contents
- State-Wise Gift Deed Stamp Duty
- Stamp Duty on a Gift Deed
- Legal Instructions Relating to Gift Deed
- Registration of Gift Deed is Mandatory
Two important points to note about a gift deed are that you can execute it for both movable and immovable property. Any transfer it facilitates is voluntary. If you execute a gift deed, it is important to register it.
It serves as evidence in cases of future disputes and is a means of explaining inheritance. However, the gift deeds must be registered and comes with stamp duty implications. If you want to know more about gift deed stamp duty and registration charges, read this article completely.
State-Wise Gift Deed Stamp Duty
In India, the gift deed format describes the legal framework for transferring ownership of property or assets as a gift between parties. When you register a legal document, especially regarding property, you have to pay a tax called stamp duty. It varies from one state to another. Here is how the stamp duty on gift deeds will be in each state in 2024:
| State Where the Gift Deed is Registered | Stamp Duty |
| Uttar Pradesh | 5% (Rs 5,000*) |
| Haryana | 5% |
| Delhi | 4% |
| Maharashtra | 3% |
| Gujarat | 3.5% |
| Rajasthan | 6% |
| Madhya Pradesh | 5% |
| Andhra Pradesh | 2% |
| Himachal Pradesh | 6% |
| Tamil Nadu | 7% |
| Karnataka | 5% |
| Punjab | 6% |
| Bihar | 5.7% |
| Jharkhand | 3% |
| Kerala | 2% |
| Madhya Pradesh | 2.5% |
| Chhattisgarh | 5% |
| Uttarakhand | 5% |
| Himachal Pradesh | 5-6% |
| Odisha | 3% |
| Telangana | 0.5 % |
| J&K | 3-7% |
| Assam | 5.6% |
| Chandigarh | 5% |
| Goa | 3%-6% |
| Manipur | 7% |
| Sikkim | 1% |
| Arunachal Pradesh | 6% |
As is clear from the table, stamp duty charges for JIT deeds range between 2% and 7%, irrespective of the state you are registered in. In many states, stamp duty on gift deeds in blood relations is exempt or levied at a subsidized rate.
For example, in Maharashtra, if a person makes a gift of residential or agricultural land to his spouse, children, grandchildren, or son’s widow, the stamp duty on the gift is up to Rs. 200.
Stamp Duty on a Gift Deed
Knowing the rate imposed by your state is only the first step in calculating stamp duty charges for a gift deeds. To accurately calculate property gift deeds charges, you need to apply the rate imposed by your state to the value of the specified property.
Stamp duty is paid by the donee or donor on the gift property deeds. Remembering that the property is not the recipient or acquirer is also important. If the transferee pays stamp duty, the transfer is not treated as a gift and is treated as a sale.
For example, in Maharashtra, suppose the stamp duty percentage is 3% and the total cost of the property is 1 crore. So, the stamp duty will be 3% of 1 crore, i.e., 30 lakhs. It is payable for registering the gift deed.
Legal Instructions Relating to Gift Deed
As per the provisions of the Transfer of Property Act, you have to register the gift deed. You or someone acting on your behalf must sign the registration document. It should be attested by two witnesses. To be clear, you cannot simply gift a property without going through a legal process.
When you go to register your gift deed, the registrar will also ensure that the correct stamp duty is affixed on the document when you present it for registration. Apart from the stamp duty, you will also have to pay the registration charges for the gift deed. As for gift deed registration charges, most states levy a rate of 1% of the property value. However, some states have a standard fee as registration charges for gift deeds.
A gift is one of the most hassle-free ways to transfer property, especially if you work within a time frame. Gift deeds are effective immediately. It helps you transfer the property quickly. Additionally, you can easily execute gift deeds to ensure you have proof of transfer and ownership in case any legal disputes arise.
Registration of Gift Deed is Mandatory
The Transfer of Property Act lays down the legal framework for transfers of property in India. According to this Act, if one wishes to transfer a house property as a gift, certain legal formalities have to be completed. These formalities are essential to ensuring that the transfer is legal and enforceable.
To transfer house property by gift under this Act, a registered instrument or document is required. The document must be signed by or on behalf of the person gifting the property and attested by at least two eyewitnesses. The purpose of attesting the document is to ensure that the transfer is voluntary and without any coercion or undue influence.
Emphasizing that the document must be formally registered with the relevant governing body. An unregistered document cannot be used as evidence of transfer of property. Has no legal significance. Additionally, payment of stamp duty on the gift deeds is also mandatory. The amount of stamp duty varies from state to state and is usually a percentage of the market value of the gifted property.
Conclusion
A gift deeds is one of the most popular means of transfer of immovable property. This will reduce the stamp duty charges. Many people prefer to gift a property transaction. This is because the charges are reduced at the time of name transfer. For more information, visit openplot.
Also read: Gift Deeds in India: Things to Consider While Transferring