A Gift Deed is a legal document through which a person voluntarily gifts a movable/immovable property being under his/her ownership to another person. The article to be gifted can be a movable or immovable property. A gift deed is enforceable immediately and does not require court permission.
According to the 1882 Transfer of Property Act. Only after the Gift Deed has been registered with the Registrar’s or Sub-office Registrar’s does it become effective. The transfer of property occurs immediately following the registration of the Gift Deed. The person gifting the property is called the Doner and the person receiving the property is called the Donee.
Things to consider in Gift Deed Registration:
- The Registrar/Sub-office registrar’s is where gift deeds are registered.
- A minor can be done, provided that the gift transferred to a minor shall be accepted on his behalf by his legal guardian.
- A gift deed does not involve any consideration of Monetary value. If there is any such consideration given, it ceases to be a gift deed.
- After the gift deed is executed, the Donee becomes the Absolute Owner of the movable/ Immovable Property and is free to exercise his right to sell, mortgage, or further gift the property.
- A donation that has been made and registered according to the law cannot be canceled. After it has been approved, it becomes the property of the donee. There are some circumstances in which gifts can be canceled under Section 126 of the Transfer of Property Act, 1882.
- In the case of gift deed in blood relation, the relationship between donor and donee should be clearly mentioned if they are blood relatives. Gift deeds to non-blood relations don’t get any stamp duty benefits at the time of Gift Deed Registration.
Requirements for a gift to be legally effective:
- Intention of the donor
- Delivery of gift to the done.
- The donee’s acceptance of the gift.
- Registration of a gift of immovable property is necessary as according to section 123 of the Transfer of property act, gift of immovable property cannot pass any title to the donee unless it is registered.
Types of gifts:
- Inter Vivos– such gifts are donated during the donor’s lifetime and consists of interests of present or future.
- Causa Mortis – These are deathbed gifts, which is future gift made with the anticipation of the donor’s death. This type of donation is only acceptable if the donor passes away as a result of the imminent illness for which he had made the gift.
- Outright – These types of gifts are made free of any restrictions.
- Onerous – Made with a burden or obligation imposed on the donee.
- Remunerative – Made to compensate for services delivered.