What is a Gift Deed?

In India, a Gift Deed is a legal document that facilitates the transfer of a gift from one person to another, as per the provisions of the law. Defined under Section 122 of the Transfer of Property Act, 1822, a Gift Deed is a legally binding document that allows a donor to voluntarily transfer an existing movable or immovable property to a donee.

For a Gift Deed to be valid, it must be made out of love and affection, without any exchange of monetary consideration, and typically occurs between family members or friends. Additionally, as per Section 17 of the Registration Act, 1908, the registration of a Gift Deed is mandatory when the donor intends to transfer immovable property.

Properties That Can Be Gifted by Deed:

• Movable or immovable property
• Existing property
• Tangible property
• Transferable property

Who Can Be a Donor and Donee Under a Gift Deed in India?

• Donor: A donor is a person who transfers the property. Anyone who is of sound mind and legally competent to enter into agreements can be a donor. Minors cannot act as donors since they are not legally capable of entering into contracts.

• Donee: A donee is the person who receives the gift. A minor can be a donee; however, the gift must be accepted by a guardian on their behalf. If the gift is onerous (attached with conditions), the minor, upon reaching adulthood, can choose to accept or return the gift.

Important Clauses in a Gift Deed in India

A Gift Deed is a critical legal document, and it must include several important clauses to ensure its validity and effectiveness. These clauses are as follows:

1. Clause for Consideration
   This clause must explicitly state that no exchange of money or other forms of consideration is involved, and that the transfer of property is made out of love and affection. The transfer will not be regarded as a gift if any consideration, no matter how small, is involved.

2. Free Consent
   The transfer must be made without any undue influence, coercion, or threats. The deed should confirm that the donor is voluntarily making the gift, with a clear intention and consent to transfer the property.

3. Rights and Liabilities
   If any rights or liabilities are associated with the property, such as rights regarding leasing or further sale, they should be clearly stated in the Gift Deed.

4. Property Details
   A comprehensive description of the gifted property must be included, covering aspects like its structure, address, area, location, and other distinguishing features.

5. Possession of Property
   The donor must be the rightful titleholder of the property and in possession of it at the time of the gift. The property being gifted must exist and cannot be something the donor intends to acquire in the future.

6. Details of Donor and Donee
   It is important to specify the relationship between the donor and donee, especially if they are blood relatives, as this can influence the stamp duty charges, which may be reduced for gifts to blood relatives in certain states.

7. Delivery Clause
   This clause confirms that the possession of the property is being delivered to the donee, either expressly or impliedly, as part of the transfer process.

8. Rights of Donee
   The Gift Deed should outline the rights of the donee, including their entitlement to make changes to the property, enjoy it peacefully, and receive rents or profits generated from it.

9. Clauses for Revocation
   While not mandatory, it is advisable to include a clause regarding the revocation of the gift, to avoid future disputes. Both parties must mutually agree to this clause.

Essential Documents Required for Gift Deed Registration in India

After the Gift Deed is signed and attested by witnesses, the applicant must pay stamp duty and registration charges according to state regulations. Additionally, the following documents are typically required for registration:

1. Aadhar Card of the applicant.
2. Identity Proofs (e.g., Driver's License, Passport).
3. PAN card of both parties for execution.
4. Original Gift Deed.
5. Document proving the title of the donor to the property (e.g., Sale Deed).
6. Two witnesses are required at the time of execution.
7. Encumbrance Certificate for the property.
8. A document certifying the Ready Reckoner Value.
9. Any other agreements related to the property.
10. Additional documents as required by state regulations.

Note that the list is not exhaustive, and additional documents such as certificates verifying the property's value may be needed, depending on the specific state requirements.

Steps Involved in Drafting and Registration of a Gift Deed in India

The process of drafting and registering a Gift Deed in India involves several key steps:

Step 1: Drafting the Gift Deed
The first step is to draft the Gift Deed, which must include the following details:

• The date and place of execution.
• Comprehensive information about the donor and donee, such as their names, dates of birth, residential addresses, and their relationship to each other.
• A detailed description of the property being gifted.
• The presence of two witnesses during the execution of the deed.
• Signatures of the donor, donee, and witnesses.

Step 2: Printing on Stamp Paper
Once the Gift Deed is drafted, it must be printed on stamp paper of the appropriate value, which depends on the stamp duty rate applicable in the respective state.

Step 3: Registration of the Gift Deed
Finally, the Gift Deed must be registered with the office of the Registrar or Sub-Registrar, following the legal requirements for registration in the relevant jurisdiction.

How CA Anytime Can Assist You:

1. Fill Out the Form: Provide the necessary details by filling out the form.
2. Request a Call-Back: Schedule a call with our experts for personalized assistance.
3. Submit Documents: Upload the required documents for processing.
4. Track Progress: Stay updated on the status of your request.
5. Receive Deliverables: Get your completed deliverables as per the agreed timeline.

Advantages of Memorandum of Understanding

Comprehensive Coverage of the Relationship
An MoU encompasses the entire relationship between the parties involved, addressing all potential aspects of the contract that may emerge. It serves as a useful tool to establish clear terms before entering into a long-term partnership or business relationship.

Time Efficiency
By providing a clear framework, an MoU streamlines the negotiation process, allowing parties to avoid the need for repeated discussions of the same terms for similar agreements. This helps to expedite the decision-making and contract finalization process.