Gift Deed: When a property is transferred to another in the form of a Gift Deed, there is a shift in ownership that is protected by law.
The following article talks about the property transfer, the need to register a Gift Deed, the registration procedure, circumstances under which a Gift Deed can be revoked and documentation
The acceptance of the gift must be made within the lifetime of the donor and should be registered under Section 122 of the Property Transfer Act, 1882 with the sub-registrar.
In case the donee dies before acceptance, then the gift will become void and invalid. In order to offer the gift deed, the donor should be competent and should not be a minor.
On the contrary, a donee can be a minor with a guardian who will act as a nominee and will share the onus of the property until the donee becomes an adult.
A Gift Deed is valid only if it is given out of love and affection, without any consideration in return by one family member/ friend to another. Also, under Section 17 of the Registration Act, of 1908, it is mandatory to have a registered Gift Deed when you want to transfer immovable property.
Important clauses in a Gift Deed: Being a very important legal document, there are certain things that you are required to mention in a Gift Deed. Some of them are –
Consideration Clause – It should be clearly mentioned in the Gift Deed that the transfer is being made out of love and affection and there is no exchange of money or any other type of consideration involved.
It is irrelevant how small the consideration is, it would not be considered a gift.
Possession of Property – The property you want to gift, must be in your possession i.e. you must be the titleholder of that immovable property.
While making a gift, the property must be in existence, you cannot gift something that you might get in the future.
Free Will – The transfer should be free from any type of coercion, undue influence, threat or fear. The gift should clearly state that the transfer is voluntary and that the transferor has a clear intention of doing so.
Information about Property – A detailed description of the property is a must. It should clearly specify the structure, address, colour, area, location, etc.
About Donor and Donee – The relationship between donor and donee is important as to whether they are blood relatives or not. Some state governments also offer a concession on stamp duty if gifts are made to blood relatives.
Rights and Liabilities – Under this clause, if any additional rights or liabilities are attached to the gift shall be mentioned. For example, any rights relating to the further sale, or leasing it further.
Rights of Donee – A clear mention of Donee’s rights forms an inseparable part of the Gift Deed. It includes the done rights to enjoy the property peacefully, to make changes to the property, receive rent or any profits that might arise from that property.
Delivery– A delivery clause talks about the action (express or implied) which would confirm the delivery of the possession of the property.
Revocation Clause – Though not mandatory, but advisable. It will help in avoiding future complications. It has to be expressly mentioned, not implied. And donor and donee both have to agree on this clause.
Stamping & Registration of Gift Deed in Delhi
- For gifting immovable property, it is required to be registered. An unregistered immovable property cannot be gifted because it is considered bad in law and cannot be passed to the donee.
- The documents are required to be stamped with appropriate non-judicial stamps and should be registered under the India Registration Act. It is also required to be attested by two witnesses.
- A registration fee of Rs. 101 and stamp duty @ 8% have to be paid on the gift deed.
- The property being gifted has to be valued by an approved value.
Agreement of Gift Deed draft templets
Our law firm provides information and helps for the Drafting and Registration of all types of Legal and Property Documents across all the Sub-Registrar Offices in Delhi including the following:-
- Sale Deed
- Lease Deed / Rent Agreement
- Agreement to Sell
- Gift Deed
- General Power of Attorney (GPA)
- Release/ Relinquishment Deed
- Other Property Documents
For more information, you may contact us by visiting at ww.legallightconsulting.com