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Guide to Gift Deed Registration: Format, Stamp Duty, and Documents Needed

A gift deed is a legal document that transfers ownership of one's property to another, with potential financial implications to be considered.

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Gift Deed Registration: Giving someone else ownership of one’s property through a gift deed is known as a gift of property. Giving a loved one a property through a gift deed has some financial ramifications that you should first take into account.

What is a Gift Deed?

Someone utilizes a gift deed when they want to give away their money or property to another individual. A gift deed can be used to freely transfer real estate, either moveable or immovable, from the donor to the donee. A gift deed prevents future disputes resulting from succession or inheritance claims and permits the property owner to transfer the property to whomever. A registered gift deed instantly transfers the property and does not require execution in court, saving time as it serves as proof on its own. This makes gift deeds more efficient than wills.

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Which gifts ought to be enclosed in a gift deed?

A gift deed is necessary when transferring either mobile or immovable property, or transferable existing property. Possessing a registered gift deed will assist you in avoiding any ensuing dispute.

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How is a gift deed drafted?

A gift deed draft has to have the following information:

  • Location and date of the gift deed’s execution.
  • pertinent details on the gift deed, including the names, addresses, relationships, dates of birth, and signatures of the donor and the donee.
  • comprehensive information regarding the land that you are drafting a gift deed for.
  • There will be two witnesses attesting to the gift deed and their signatures.

Depending on the amount required, you must print the gift deed on stamp paper and register it at the registrar’s or sub-registrar’s office.

Rules for gift deeds

Make a note of the following before transferring ownership of real estate via gift deed.

  • Good health: For the donation deed to be executed voluntarily and not against their will, the donor must be in good mental and physical health.
  • Free of encumbrances: The property that is going to be given away shouldn’t have any liens, mortgages, or court cases against it. The donor should wait to execute the gift deed until after thoroughly investigating the title.

What’s in a property gift deed?

Include the following essential points in the gift deed template.

There is no coercion or money involved.

Make sure the donation deed includes this consideration clause. The gift deed must state that the giver is not exchanging money and is acting only out of love and affection, not under duress or pressure.

When you give something, you are the property’s owner.

Only the owner of a property can give it away. You cannot offer property as a gift deed to someone else, even in anticipation, if you do not have the title to it.

Explain the asset.

The format of the property donation deed must include all relevant information about the property, including its address, kind, structure, area, and location.

Connection between the donee and the giver

A stamp duty exemption may be available from certain state governments if the donor and donee are blood-related. In any case, it is crucial to ascertain the donor’s relationship and complete the property donation deed in the prescribed manner.

Bring up liabilities

The gift deed should contain any rights or obligations associated with the gift, such as restrictions on the donee’s ability to sell or lease the property, among other things.

Delivery clause

This gift deed mentions the action of delivering possession of the property.

Revocation of the present

Additionally, the donor might expressly state whether or not they wish the donee to abide by a revocation clause in the gift deed. This gift deed provision requires the consent of both the donee and the donor.

Clause of Maintenance

A recent ruling by the Supreme Court mandates that parents who give their property to their children in exchange for care include a maintenance clause in the gift deed. If the kids don’t think the parents are nice, the Gift Deed becomes final if they don’t do it.

Indian courts have seen numerous instances where elderly parents approached tribunals to request the use of the 2007 Maintenance and Welfare of Parents and Senior Citizens Act. Parents have given their children property out of affection and cannot take it back because they did not include a maintenance clause.

The property gift deed’s drawbacks

  • It is exceedingly difficult to reverse a gift deed once it has been performed unless there is compelling proof to the contrary. Changing one’s mind is not feasible, so one must be certain before completing the donation deed.
  • After executing the gift deed, the donee will have complete authority over the property, and the donor will no longer have any control over it.
  •  May be abused: A donee may abuse the current system to get out from under paying taxes.

Registration of gift deeds

According to the Transfer of Property Act of 1882, a Gift Deed is only enforceable upon registration. The donor’s signature, the donee’s signature, and the attestations of two witnesses are all included in the Gift Deed registration.

Registration of gift deeds: Documents needed

In addition to the previously specified paperwork, you will also need to present the original gift deed, identification, PAN, Aadhar, the property’s selling deed, and any other paperwork related to any other agreements relevant to this property.

Stamp duty on gift deed registration

State Stamp duty for gift deed
Delhi Men: 6%

Women: 4%

Gujarat 4.9% of the market value
Karnataka Family members: Rs 1,000- 5,000

Non-family: 5.6% of the land value

Maharashtra Family members: 3%

Other relatives: 5%

Agricultural land/ residential property: Rs 200

Punjab Family members: NIL

Non-family: 6%

Rajasthan Men: 5%

Women: 4% and 3%

SC/ST or BPL: 3%

Widow: None

To wife: 1%

Immediate family: 2.5%

Tamil Nadu Family members: 1%

Non-family: 7%

Uttar Pradesh Men: 7%

Women: 6%

West Bengal Family members: Rs 1,000

Non-family: 6%

Above Rs 40 lakh: Surcharge of 1%

Income taxes on bequests

A discrepancy of more than Rs 50,000 occurs when someone purchases immovable properties without proper consideration and declares them in the gift tax returns.

Gift deed exemptions from taxes

If the donee receives the property from any of the following, they will not be taxed and the aforementioned clause will not apply.

  • Both individuals receive the gift deed if a relative gives it to a HUF member.
  • The recipient received a present on their wedding anniversary.
  • If someone obtains a gift deed through inheritance or a will.
  • If someone obtains a gift deed with the payer or donor’s death in mind.
  • The Income Tax Act treats a gift deed received from a local government as a gift in Section 10(20) Explanation.
  • Trusts, educational institutions, hospitals, or other medical facilities can obtain gift deeds.
  • If an organization or trust listed under Section 12AA obtains a gift deed.

How would you gift property after your death?

You can use a will to give property to someone after you pass away.

What will happen if the donation deed is rejected?

Refusal to accept a gift deed while the giver is still alive renders it invalid.

Is it possible to revoke a property gift deed?

Certain situations may allow for the revocation of a gift deed, despite the legal ownership of the land by the donee.

  • Someone used fraud or coercion to make the donation deed.
  • if it turns out that the gift deed’s justifications were repugnant, illegitimate, or immoral.
  • The decision initially allowed for the revocation of the gift deed in specific situations.

If the donor passes away, his or her legal heirs may revoke the gift deed.

Parties can revoke a gift deed through mutual agreement

In the gift transaction, parties can withdraw the gift deed by mutual agreement if they fail to meet a condition.

The donor cannot revoke a gift deed if it was not a result of fraud or misrepresentation. To contest a gift deed, one must prove that the donor did not approve it and that someone executed it through fraud.

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