A Gift Deed is a legal document used when someone transfers ownership of property, money, jewellery, or other assets to another person without any payment.
In India, a Gift Deed ensures that the transfer is lawful, transparent, and protected under the law.
Here is a simple explanation of what a Gift Deed is, why it is beneficial, and how to register it.
What is a Gift Deed?
A Gift Deed is a written legal document that records the voluntary transfer of an asset from one person (Donor) to another (Donee) without any monetary consideration.
It must be accepted by the person receiving the gift during the donor’s lifetime.
A gift may include:
- Land or house property
- Money
- Jewellery
- Shares
- Movable assets
Benefits of a Gift Deed
1. Immediate and Secure Transfer
Ownership transfers instantly once the Gift Deed is executed and registered.
2. Legal Protection
The Gift Deed acts as proof that the transfer was voluntary, preventing future disputes.
3. Tax Benefits for Close Relatives
Gifts received from close relatives (parents, siblings, spouse, children, etc.) are usually tax-exempt under Indian Income Tax rules.
4. Avoids Court Probate
Unlike a Will, a Gift Deed takes effect immediately, avoiding probate or court procedures later.
5. Useful for Family Settlements
Helps transfer property within families smoothly and legally.
Step-by-Step Process for Making a Gift Deed in India
Step 1: Draft the Gift Deed
The deed must clearly mention:
- Donor and donee details
- Relationship
- Description of the property
- Confirmation that the gift is voluntary
- No money involved
Step 2: Attach Required Documents
Common documents include:
- Donor’s ID and address proof
- Donee’s ID and address proof
- Property documents
- Encumbrance certificate (if required)
- Latest tax receipts
Step 3: Pay Stamp Duty and Registration Fee
Stamp duty varies by state. For close relatives, many states offer lower stamp duty on gift deeds.
Payment is made at the sub-registrar office or online (if available in your state).
Step 4: Register the Gift Deed at Sub-Registrar Office
Both the donor and donee must visit the Sub-Registrar Office with two witnesses.
You must:
- Sign the Gift Deed
- Provide biometric verification
- Get the registered copy from the registrar
Registration makes the gift legally valid.
Step 5: Mutation of Property (If It’s Real Estate)
After registration, apply for mutation in local municipal records.
This updates the property ownership under the donee’s name for tax purposes.
Important Points to Remember
- Gift must be accepted by the donee
- Donor must have clear ownership
- Gift Deed must be registered to be legally valid
- No money should be exchanged
- Gifts to non-relatives may attract tax
FAQ
Q1. Is a Gift Deed valid without registration?
For property, registration is mandatory. Without registration, it is not legally valid.
Q2. Can a Gift Deed be cancelled?
A registered Gift Deed can only be cancelled with mutual consent or by a court order.
Q3. Do I need a lawyer to draft a Gift Deed?
While not mandatory, it is recommended to ensure accuracy and legal safety.
⚠ Disclaimer
This article provides general information about Gift Deeds in India. Actual stamp duty, documentation, and legal requirements may vary by state and individual situation. Always consult a legal professional or registrar office before drafting or registering a Gift Deed.