Property Gift Deed in India: Stamp Duty, Format, Rules & Relation

There is nothing better than getting a gift, and there is also joy in giving. No matter how big or small the gift is, the sentiment is the same. When you are gifting something as large as property or a house, however, there are certain steps that should be followed, this is done so that the new owner has clear titles and documentation of the property and how they came to own it. Gift deeds have no become increasingly popular because of the governmental documentation that comes along with it.

Gift Deed meaning and why you need to know about it?

When it comes to the Transfer of Property Act, the Gift Deed is the unsung hero of the real estate world. It may not have the fanfare of a property purchase or sale agreement, but it sure plays a big role in transferring ownership of a property. So, buckle up and let's dive into the world of Gift Deeds!

What exactly is a Gift Deed?

A Gift Deed is a legal document that is used to transfer ownership of a property from one person to another as a gift. It's a simple yet powerful way to show your love and appreciation for someone by giving them a gift that they can cherish for a lifetime.

How is it different from Sale or Purchase Agreement?

Well, unlike a Sale or Purchase Agreement, a Gift Deed doesn't involve any exchange of money. It's a pure act of love and generosity from one person to another. It's also different from a Will as it doesn't come into effect after the donor's death, it transfers the ownership of the property immediately.

How to get a Gift Deed done?

Getting a Gift Deed done is a simple process, just follow these steps:

• Choose the right stamp paper value as per the market rate (Source: Legal Desk)
• Fill out the Gift Deed form with all the relevant details
• Get it signed by the donor and two witnesses
• Get the Gift Deed registered at the Sub-Registrar's office
• Breathe a sigh of relief, you've successfully transferred ownership of the property!

Is a Gift Deed valid forever?

The validity of gift deed depends on various factors such as the age of the donor, the relationship between the donor and recipient, and whether it's executed properly. However, it's a legally binding document and holds up in a court of law if challenged.

If you're looking to transfer ownership of a property as a gift, NoBroker can assist you with all the legal formalities involved in the process. From getting the right stamp paper value to getting the Gift Deed registered, we've got you covered!

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A gift has to meet certain criteria –

• It has to be tangible
• It has to be well defined existing movable or immovable property
• It has to exist in the present and can’t be a future property
• It has to be transferable

Gift Deed vs Will

A will and Gift deed are two different legal instruments. 

A will is a document empowered by the law of succession, which comes into power only after the death of the testator. It can be revoked many times, and need not be registered.

Meanwhile, a gift deed comes under the ambit of Income tax and cannot be revoked, unless under some specific circumstances. A gift deed of property must be registered under section 123 of the Transfer of Property Act 1882 and Section 17 of the Registration act of 1908.

A will is comparatively cheaper because for a registered gift deed you will have to pay stamp duty and registration charges.

Drafting a Gift Deed – format for Gift Deed

Like any legal document, the Gift Deed also needs to follow a certain format and meet certain requirements to be considered valid. This is why the best policy to follow is to have a lawyer assist you in drafting a gift deed. The deed must state-

• What is being gifted and from whom to whom as well as their relationship whether gift deed in blood relation or not.
• It should look like a contract between donor and donee where there is free and open giving and receiving of the gift.
• It should state that the donor is giving the gift out of free will and not being forced, it should also state that there is no exchange of money in return for the gift.
• The Gift Deed should also mention that the donor is not bankrupt and should be above 18 years of age.
• It should mention the date and location where the registration will take place.

Accepting a Gift Deed:

This is as important as giving the gift, the donee or receiver of the gift must accept it by signing the Gift Deed. There can’t be much delay as the gift and the Gift Deed is considered invalid if the donor dies before the donee accepts the gift.

Registering a Gift Deed or Requirements for Gift Deed:

In accordance with Section 123 in The Representation of the People Act, 1951, the gift cannot be passed on to the receiver unless and until it is registered. What you should keep in mind while registration –

• The cost of registration is calculated based on the value of the gift
• The Deed must be signed by the donor
• The Deed should have two witnesses and it has to be attested by both of them
• The donor and donee must be present in the office of the Registrar
• Valid Identification documents (passport, driving license etc.) and PAN card must be submitted to the Registrar
• Stamp duty and Transfer Duty must be paid

What's the format of a Gift Deed?

The format of a Gift Deed is pretty standard, it includes details such as the names and addresses of the donor and the recipient, description of the property being gifted, the date of the Gift Deed, and signatures of the donor and two witnesses. (Source: Ministry of Law and Justice)

NRI Gift Deed Format

The NRI Gift Deed format is as follows:

KNOW ALL MEN BY THESE PRESENTS that I, _____________ S/o Sh.___________ r/o _______________, transfers voluntarily, the property bearing no.___________ situated at _______________ (more particularly described in the schedule annexed hereto), the estimated value of which is Rs._____________ (Rupees_____________ only) to my daughter Smt.____________ w/o of Sh._________________ (hereinafter referred to as “the donee”) To Hold the same to the donee absolutely forever. I further declare that the said gift has been made by me out of my natural love and affection for the donee and the same has been accepted by the donee.

IN WITNESS WHEREOF, I have executed this deed this ________ day of __________.

Witness:

1.

2.

DONOR

I, Smt. ______________, the donee hereby accept the gift of the said property.

DONEE

Common questions about the Gift Deed:

Who is eligible for a gift deed?

You can gift anyone. While minors can’t be a donor, they can be a done, they are able to receive the gift if they have a guardian who will accept the gift on their behalf. Once the minor becomes an adult, they can either accept the gift or return it.

Read: Everything You Need to Know About Conveyance Deed

Who can create a Gift Deed?

Anyone can create a Gift Deed, as long as they are not minors or are being forced to create one. You must also have valid identification proofs like Adhar, passport etc.

What documents are needed to create a gift deed?

For a Gift Deed to be valid it needs to be registered, for registration, you will need to hand over documents like passport, PAN, driving license etc. to the Registrar.

Is stamp duty payable on gifted property?

Yes, you must pay stamp duty and transfer duty on the deed of gift property. The cost of Stamp duty will vary in each state.

Is there a Tax levied on Gift Deed?

There is no tax on Gift Deeds in the hands of the done as per the Income Tax Act if they are close relatives (mother and daughter etc.). If the done is not a close relative, then there will be a tax levied if the total of all the gifts is valued at more than Rs.50,000.  If it is more than this amount, it will be taxable without any threshold exemption.

If you are a close relative receiving the gift, then the first time you will pay tax is when you sell the property. This will be counted as short term (less than 36 months) or long-term gains. If it is a short term, you will pay tax as per the bracket it falls under; if it is long term you will have to pay 20% tax. If you don’t wish to do so, you can invest this money by buying residential property or capital gains bonds of Rural Electrification Corporation (REC) or the National Highway Authority of India (NHAI).

Read: Here’s Why Sale Deed Is So Important

Important clauses in a Gift Deed

• It should be stated explicitly in the Gift Deed format in word that the donation is made out of love and affection and that no money or other kind of payment is involved. It makes no difference how tiny the payment is; it is not considered a gift.
• The property you want to give away must be in your possession, which means you must own the title to it. When giving a gift, the property must already exist; you cannot give something that you may acquire in the future.
• Any form of coercion, undue persuasion, intimidation, or fear should be avoided during the transfer. The gift should express unequivocally that the transfer is voluntary and that the transferor intends to do so.
• It is necessary to provide a full description of the property. It should include information on the structure, address, colour, area, and location, among other things. These are the requirements expected by the property gift deed rules.
• Whether the donor and donee are blood relatives or not, the link between them is crucial. Some state governments also give stamp duty exemptions for presents presented to blood relatives. Please note that this is different from the gift tax exemption in blood relations.If the gift comes with any additional rights or obligations, this condition must be indicated. For example, any rights to a subsequent sale or lease of the property of the exchange deed. Also, gift deed property can be sold without any conditions attached. 
• The Gift Deed is inextricably linked to a clear declaration of Donee rights. It comprises the rights to peacefully enjoy the property, to make changes to the property, to receive rents, and to profit from the property.
• A delivery clause refers to the action (express or implicit) that confirms the delivery of property possession.
• Although not required, it is recommended. It will aid in the prevention of future issues. It must be stated explicitly, not implied. This clause must be agreed upon by both the donor and the donee. Make sure you have a proper gift deed registration.

Who can be a donor/donee?

A person who transfers immovable property is known as a donor. A donor can be someone who is of sound mind and capable of agreeing. A minor cannot donate since he or she is unable to engage in a contract.

A donee is someone who accepts a gift or transfer that has been offered to him. A minor can be a donee, but the gift must be accepted on behalf of the donee by the donee's guardian. In the case of an onerous present (one that comes with strings attached), a minor can either accept or return the gift after reaching adulthood.

Documents required for Gift Deed registrations

After you've double-checked that your Gift Deed is completed, and witnessed you've paid the stamp duty and registration fees required by your state. You'll also need a few extra documents, such as —

• PAN Card  
• Aadhar Card 
• Original Gift Deed 
• ID Proofs, such as Driver's Licence, Passport, etc.
• A document such as a sale deed establishes the donor's ownership of the property.
• Other property-related agreements that you may have entered into

The list is not exhaustive; depending on your state, you may require additional documents such as certificates relating to the value of your property. If the gift comes with any additional rights or obligations, this condition must be indicated. For example, any rights to a subsequent sale or lease of the property.

What type of properties can be gifted?

Gift deed rules in India state that particular types of property can be gifted. They are listed below -

• A movable or immovable property
• A transferable property
• An existing property
• A tangible property

The Gift Deed has various advantages that can be attributed to it. Gifts are advantageous since they are made within the donor's lifetime. If you want someone special to look after your possessions or if you need to aid someone, you can transfer your property as a gift. Also, if there is a good probability that legal issues could arise in the future, some people would create a Gift Deed to avoid such disputes.

The gift deed of immovable property formats for from father to son, gift deed blood relation format, and more etc. are all available online. 

Can a Gift Deed be revoked/cancelled?

It is impossible to rescind a donation that has been made and registered per the law. After it has been approved, it becomes the property of the donee. The giver cannot cancel the deed on his or her own. A legal Gift Deed is also one in which the parties have agreed that the deed will be revocable in part or whole by the donor's will.

There are some circumstances in which gifts can be cancelled under Section 126 of the Transfer of Property Act, 1882. The cancellation of the Gift Deed is included in the revocation, and the donor retains control of the property. The terrain is –

• If the donor and donee agree that the gift will be withdrawn if certain specified events occur or do not occur, the gift will be cancelled. The important thing to remember here is that the donor should not have any control over the occurrence of such an incident. In provisions of the Gift Deed, both parties must have agreed to such a condition.
• The terms should not be immoral, illegal, or repugnant in the eyes of the property.

So, if the donation was made with the foregoing grounds in mind, it can be cancelled. If the donor passes away, his heirs have the right to have the deed revoked.

What are the gift deed clauses and what is included in them?

A Gift Deed can have various clauses, but some of the common ones include:

• Clause specifying the description of the property being gifted
• Clause specifying that the gift is made out of love and affection and not under any coercion or undue influence
• Clause specifying that the recipient accepts the gift voluntarily and without any obligation
• Clause specifying that the donor has full rights to transfer the property and it's not encumbered in any way

What are the tax implications of gifting a property?

Section 56(2)(x) of the Income Tax Act of 1961 states that if a person gets an amount of money without consideration over fifty thousand rupees after April 1, 2017, the entire sum is taxed under the heading "Income from other sources." The following individuals are exempt from the provisions of the clause:-

• from any family member; or
• on the occasion of the individual's marriage; or
• as a result of a will or inheritance; or
• in anticipation of the payer's or donor's death, as the case may be; or from any municipal government
• any trust or institution referred to in clause (23C) of section 10; or any fund, foundation, university, or other educational institution, hospital, or other medical institution, or any trust or institution referred to in clause (23C) of section 10; or
• from or on behalf of any trust or institution that has been registered under sections 12A or 12AA; or
• sub-clause (iv), sub-clause (v), sub-clause (vi), or sub-clause (via) of clause (23C) of section 10; or by any fund, trust, or institution, or any university or other educational institution, or any hospital or other medical institution referred to in sub-clause (iv), sub-clause (v), sub-clause (vi), or sub-clause (via) of clause (23C) of section 10; or

Stamp duty on gift deed in Delhi in blood relation

The following are important considerations to remember when registering a gift deed in Delhi:

• If the donee is a woman, stamp duty is 4%; if the donee is a man, stamp duty is 6%. Even if the gift is made to a family member such as a son, daughter, wife, husband, sister, brother, or other relatives, this tax must be paid.
• The registration fee is 1% of the entire Consideration value, plus Rs. 100/- for pasting costs.
• At the time of presentation, both the donor and the recipient must be present in the registrar's office, together with identity documents such as a PAN card, an election card, a passport, a driving licence, and so on.
• During the Presentation before the Sub Registrar for the Registration of Gift Deed, two witnesses must be present, as well as identity documents.

Gift deed registration fees

State	Stamp duty for gift deed
Delhi	Women: 4%Men: 6%
Gujarat	4.9% of the market value
Karnataka	Family members: ₹1,000- 5,000Non-family: 5.6% of the land value
Maharashtra	Family members: 3%Other relatives: 5%Agricultural land/ residential property: ₹200
Punjab	Family members: NILNon-family: 6%
Rajasthan	Women: 4% and 3%Men: 5%SC/ST or BPL: 3%Widow: NoneTo wife: 1%Immediate family: 2.5%
Tamil Nadu	Family members: 1%Non-family: 7%
Uttar Pradesh	Men: 7%Women: 6%
West Bengal	Family members: 0.5%Non-family: 6%Above ₹40 lakh: Surcharge of 1%

Can a Gift Deed be cancelled or changed?

Once the Gift Deed is registered and executed, it cannot be revoked or altered. This is unless the donor has made a provision to do so. It can also be revoked if the donor and do agree on certain terms that allow the Deed to be revoked. At times, the donor might also mention that the property or house will be given back to his(donor’s) family upon the death of the done.

Gift deeds not only fulfil their purpose of a gift but are also well documented. If you have more questions or are looking for assistance related to Gift Deeds, feel free to drop us a message. NoBroker is here to assist you, you get a home, rental agreement, legal assistance, loan assistance and a lot more.

A comprehensive guide to Gift Deed and why NoBroker is your best bet for real estate

A Gift Deed may seem like a small and simple document, but it packs a punch when it comes to transferring ownership of a property. So, make sure you have all your ducks in a row, choose the right gift deed stamp paper, fill out the form correctly, get it signed and registered, and voila! You're done! And don't forget to use NoBroker for all your real estate needs.