A Gift Deed Is A Written Legal Document And As The Name Suggests Is Related To Gifting. A Gift Deed Is Simply An Agreement Which Is Made By The Owner Of The Property Or A Person Having Power Of Attorney (POA) For The Primary Purpose Of Gifting The Listed Property In The Deed. This Deed Is An Exception To The General Rule Of Any Contract That Both The Parties Get Some Consideration Which Is Essential To Render A Contract Legally Valid But Under The Gift Deed, The Donor Has No Such Consideration But Transfers The Property Voluntarily As S/He Is Willing To Transfer It To A Particular Person Out Of Love And Affection. The Provisions Regarding The Gift Deed Are In The Transfer Of Property Act, 1882 As Well As The Indian Contract Act, 1872. Any Person Can Make The Gift Deed If S/He Is Willing To Transfer The Rights Of Property As A Gift Or When The Transaction Does Not Involve Money Or To Legally Represent The Gift Being Transferred.
A Gift Deed Presents All The Records And The Details Concerning The Transaction Being Done Between The Donor; The Giver Or The Person Who Is Making The Gift Deed And The Donee; The Receiver In Whose Name The Gift Deed Is Being Made. This Transaction Shall Be Entirely Voluntary On The Part Of The Donor And The Donee On The Other Hand Shall Accept The Gift Before The Donor Dies, Or Within The Lifetime Of The Donor. A Gift Deed Can Be Made For A Movable Property As Well As An Immovable Property But There Is A Slight Difference In The Time When The Two Will Come Into Effect.
The Gift Deed For A Movable Property Will Be Effective Once The Delivery Is Made Or When The Deed Is Registered Whereas The One For The Immovable Property Will Be Effective If It Is Registered By The Appropriate Registrar Or The Sub-Registrar. Once, The Gift Deed Is Registered As Per The Provisions Laid Out By The Law There Is No Need To Get It Executed In A Court Of Law And It Immediately Comes Into Effect. There Is A Mandate That The Gift Deed Which Offers To Transfer Any Immovable Property Needs To Be Registered Whereas There Is No Obligation As Such To Get The Deed For Movable Property Registered.
Essential Clauses of a Gift Deed
Transfer is Voluntary
It Is Essential To Mention In The Gift Deed That The Transfer That Is Being Carried Out Is Undoubtedly Voluntary And Is Not Taken Under Any Kind Of Undue Pressure. It Is Important That The Donor Is Transferring The Ownership Of The Property To The Donee Without Any Influence Or Any Kind Of Fear Or Coercion.
Details of Donor and Donee
In Any Legal Agreement, The Details Of The Parties Shall Be Very Clearly Mentioned, And The Same Goes With A Gift Deed, The Deed Shall Include All The Relevant And Important Details Of The Donor And The Donee’s Full Name, Full Address, And The Relation Between The Two Parties. In A Gift Deed, The Relationship Becomes Essential As From The Description Of The Relationship It Can Several Times Be Inferred If The Gift Deed Is Genuine And Is Made Without Any Coercion.
Consideration Is Essential In Any Contract But A Gift Deed Is An Exception To This General Rule As The Basis For A Gift Deed Is Love, Affection And The Kind Of Relationship That The Parties Share. It Is Integral That The Gift Deed Is Made Out Of Love And Affection Towards The Donee Without Expecting Any Kind Of Consideration In Return. In A Gift Deed, There Shall Be No Consideration For The Donor.
It Should Be Included In The Deed That The Property As Mentioned Is In Existence And The Donor Has Clear And Absolute Ownership Over That Property And Has Pledged To Transfer The Ownership To The Donee. It Is Crucial In A Gift Deed That The Ownership Is Being Transferred To The Donee, Mere Possession Is Not Enough As The Ownership Then Remains With The Donor.
Details of the Property
The Details Of The Listed Property Shall Be Clearly Mentioned In The Deed Including If The Property Is Movable Or Immovable, The Full Address Of The Property In Case Immovable And The Description Of The Property Whether It Is Movable Or Immovable.
Acceptance by Donee
The Gift Deed Shall Mention The Acceptance By The Donee As It Is On The Part Of The Donee Either To Accept The Gift And If It Is Accepted The Same Shall Be Mentioned In The Gift Deed.
Rights of the Donee
The Donee Enjoys Certain Rights In A Gift Deed And The Rights Related To The Property Including The Right To Enjoyment, To Sell, Mortgage Or Lease The Property Which Is Being Transferred Shall Be Mentioned In The Gift Deed.
In Any Legal Contract, There Need To Be Witnesses Who Will Sign The Document Along With The Parties. There Shall Be At Least Two Witnesses For A Gift Deed And Their Names, Addresses Shall Also Be Mentioned Along With The Attestation. Witnesses Are Important In Case The Deed Is Challenged In Court To Testify If The Deed Is Genuine Or Not.
Delivery of the Gift Property
The Deed Should Clearly Mention The Intention Of The Donor To Deliver The Possession Of The Property To The Donee, Whether The Delivery Of Possession Of The Gift Property Is Implied, Express, Absolute Or Symbolic.
Revocation of the Gift Deed
There Is No Necessity Of Inserting A Revocation Clause In A Gift Deed But Nonetheless Inserting A Revocation Clause Can Always Help With Preventing Or Resolving The Conflicts That May Arise In Future.
Registration of a Gift Deed
A Gift Deed Shall Be Registered By The Registrar Or The Sub Registrar Office Whomsoever Is Having The Jurisdiction Based On The Location Of The Property In Case Of Immovable Property, The Transfer Of Immovable Property As Per Section 123 Of The Transfer Of Property Act, 1882 Is Only Valid If The Deed Is Registered And Is Signed And Attested By The Parties And The Two Witnesses. If The Property Is Movable The Jurisdiction Of The Registrar’s Office Or The Sub Registrar’s Office Will Be Based On The Residence Of The Donor. A Gift Shall Be First Drafted Including The Above-Mentioned Clauses On A Stamp Paper And Shall Be Signed And Attested By Both Parties Along With The Two Witnesses.
Gift Deed and related rules of taxation
The Donee As Per Section 56(2)(X)(B) Is Liable To Pay The Tax In Case The Sum Of Money Or The Value Of The Property Is Above Rs. 50,000 But There Are Several Exceptions To The Rule And In Those Cases, The Donee Need Not Pay Any Tax Whatsoever Which Includes A Gift From A Relative Or On The Occasion Of Marriage, Under A Will Or Through Inheritance, Received From Any Institution Recognized In The Income Tax Act Etc.
Get your Gift Deed drafted with WeVaad
It Is Possible Nowadays To Extract The Format Of Any Legal Document By Just Typing It Out In Google But What Is Important To Note Is The Fact That The Majority Of Formats That Are Available On The Web Are Not Legally Correct Or Authorized And For A Person Who Has Not Acquired Legal Knowledge It Becomes Daunting To Choose Which Format Will Be The Correct One To Draft Your Deed. Hence, It Is Always Beneficial To Get Your Deed Drafted By An Experienced Legal Expert.
WeVaad Is An Online Dispute Resolution (ODR) Platform Which Along With The Services Of ODR Renders Services Relating To Agreement Drafting And Since We Have A Team Of Experienced Legal Experts And Lawyers Who Have Expertise In Every Sphere Of Law, Drafting A Gift Deed Becomes An Easy Task For Them. So, If You’re Looking To Gift Your Property To Your Loved One Consider Getting Your Gift Deed Drafted By Us.