GIFT DEED REGISTRATION – ALL VALUERS NEED TO KNOW

In India, property transfers as gifts are governed by the Transfer of Property Act, 1882 (“Act”). A gift of a property involves transferring the ownership of one’s property to another person by executing a gift deed. The gift deed is an instrument through which the immovable or movable property owner transfers his/her property to another person without consideration as a gift.

A Gift Deed is the document through which a person voluntarily gifts a movable/immovable property to a person. A Gift Deed minimizes the chances of disputes in property inheritance cases. The registration of a Gift Deed involves charges set by the state government. The article to be gifted can be a movable or immovable property. A gift deed is a valuable document in succession matters as it differs from a valid ‘Will’ made by the property owner.

Unlike a Will, the Gift Deed is immediately executable, and one does not require a court to get it enforced. Hence, a Gift Deed saves time compared to a settlement through a will. Under a Gift Deed, the person gifting the property is called a Donor, and the receiver is called ‘Donee.’

Gift Deed under the Transfer of Property Act

The Transfer of Property Act 1882 covers the Gift Deed. The Act specifies that the Gift must be given without any monetary consideration. In addition to this, the Donee must accept the Gift within the lifetime of the Donor.

Under the Transfer of Property Act, the Gift Deed becomes effective only after its registration with the Registrar or Sub-registrar’s office. After the registration of the Gift Deed, the transfer of property is immediate.

The Transfer of Property Act clearly mentions the validity of the Gift Deed. According to the Act, a Gift Deed is valid only if-

• The property mentioned in the Gift Deed must exist when making the Gift.
• The Donor of the concerned property must be the lawful owner with a clear title.
• The Gift must be voluntary and without coercion.
• The Gift must not involve monetary/otherwise consideration
• The Donee must accept the Gifted property

Clauses in a Gift Deed

The following are some of the important clauses that need to be included in the Gift Deed:

1. Clause for Consideration
   The gift deed should mention that the donor is transferring the gift property out of love and affection towards the donee, and there is no consideration of any other type involved in the transfer. 
2. Possession of Property
   If you were the titleholder of that immovable property in your possession, that is, the property you want to gift, it would be best. When making a gift, the property must exist and you can not give something that you can probably receive in the future.
3. Free Consent
   Any improper influence, coercion, fear, or threat should be free from the transfer. The donation should explicitly state that there is a strong intention for the transferor to do so, and the transfer is voluntary.

1. Property Details
   It is important to provide an exhaustive property description, which can specify the address, structure, color, location, place, etc.
2. Details of Donor and Donee
   To justify, whether they are blood relatives or not, the relationship between donor and donee is important to note. Some state governments also offer a concession on stamp duty if gifts are made to blood relatives..
3. Rights and Liabilitiess
   It must be declared in the gift deed if any new rights or liabilities are added under this clause. Entitlements can include any privileges relating to further sales or supplementary leases.
4. Rights of Donee
   A separate indication of the privileges of Donee produces an attached section of the Gift Deed. This includes the rights of the donor to make improvements to the property, peacefully enjoy the property, and receive rentals or other income from the gifted property.
5. Delivery Clause
   A delivery clause, which would confirm the delivery of the possession of the property, generally talks about the actions of the transfer ‘expressly or implied’.
6. Clauses for Revocation
   The gift deed need not have a revocation clause of the gift property, but it is advisable to avoid any conflict in the future.

Gift Deed Registration

According to the transfer of property Act 1882, a gift Deed is valid only if registered. The registration of a Gift Deed includes the donor’s signature and the donee and attestation by two witnesses (mandatory). In fact, the Gift Deed will be enforceable only if it is registered with the registrar’s office.

The registration of a gift deed involves the enumeration of the essential clauses on a stamp paper and payment of the requisite stamp duty. The value of the stamp duty varies from state to state. It must be noted that if the gifted asset is movable, the jurisdiction of the registrar’s office will be according to the place of residence of the donor.

What are the essential documents required for Gift Deed Registration in India?

After making sure that the Gift Deed is signed and attested by the witnesses, the applicant is required to pay the stamp duty and registration charges as per the state regulations. The applicant is needed to carry a few other essential documents which are as follows:

• PAN card of both the parties for execution of the Gift Deed;
• Aadhar Card of the applicant;

• Passport size photograph

• Identity Proofs, like Driver License, Passport, etc;
• Any other agreements which the applicant might have entered into concerning Property;
• Original Gift Deed that is to be executed;

• Document such as a sale deed or Title Deed to prove the ownership of the donor

• A total of two witnesses are required at the time of execution of Gift Deed;

• ID proof of the witnesses

• The Encumbrance Certificate;
• A document certifying the Ready Reckoner Value; and
• Other essential materials as may be required according to the state requirements

The applicant might need some other documents, as the above-mentioned list is not exhaustive. The applicant may need to add certain documents like certificates relating to the value of property depending on the different state, etc.

The steps Involved In The Drafting Of the Gift Deed Are As Follows:-

STEP 1

Draft a deed with the following essentials.

• Mention the Date and Place for execution
• Information about the Donor and Donee like Date of Birth, Residential Address, Name, and Relationship among them.
• A total description of the property
• Presence of Two Witnesses
• Signatures along with the witnesses of Donor and Donee

STEP 2

Get it printed on the stamp paper of applicable value contingent upon each state Stamp rate.

STEP 3

Lastly, kindly get the Gift deed registered at your registrar/sub-registrar office.