Gift Deed

Gift Deed

Gift Deed

Giving and receiving a gift is considered as a way of expressing love and it is enjoyed by both the parties. But in order to make a gift of a property valid, the donor of the gift has to create a Gift Deed which should be duly signed by him/her and attested by 2 witnesses. In the case of immovable property, the Gift Deed has to be mandatorily registered so as to transfer the ownership to the donee.

The lawful owner of a property can transfer it to another party without any monetary consideration through a gift deed. All such deeds must be signed by the donor, attested by at least 2 witnesses and registered. Once the gift deed is properly executed and registered, it vested all the legal rights and ownership to the donee i.e., the person to whom the gift has been made and he or she becomes the absolute owner of the property thereafter.

Advantages of Gift Deed

Legally Binding:

Once the Gift Deed is executed and accepted by the donee it becomes legally binding on both the parties.

Proof of Title:

The deed acts as evidence that proves the title of the property gifted.

Conditions:

  • The property must an existing movable or immovable property
  • It should be transferable
  • It should not be a property that exists in the future
  • It has to be tangible property

Process of Gift Deed

Drafting:

The Gift Deed has to be drafted with the help of a legal professional who knows to incorporate every valid detail. The deed must contain information pertaining to who gifts the property to whom, the description of the property, date of transfer, etc.

Acceptance:

In case of gifting the process becomes valid only on the acceptance donee. The donee has to accept the gift during the lifetime of the donor else the gift becomes invalid.

Registration:

According to Section 123 of Transfer of Property Act states that all deed of gift immovable property must be registered to make the transaction valid.

Frequently Asked Questions

Is Registering a Deed of Gift is Mandatory?

Yes, a deed which indents to gift an immovable property must be mandatorily registered as per Section 123 of the Transfer of Property Act.

Which Law Governs did apply on Deed of Gift?

Transfer of Property Act.

Why is it Important to make a Deed of Gift?

It is important to create a deed of the gift due to the following reasons:

  • LEGALLY BINDING: Once the gift deed is executed and accepted by the done, it becomes legally binding on both the parties.
  • PROOF OF TITLE: The deed act evidence that proves the title of the property gifted.
  • TAX-FREE: The gifts made to relatives defined by the Income Tax Act are exempt from tax in the hands of the donee.

What are the conditions involved in Transferring a Property as Gift?

  • The property must an existing movable or immovable property.
  • It should be transferable
  • It should not be a property that exists in the future
  • It has to be a tangible property