Gifting a property to a loved one can be a powerful emotional gesture, but when it comes to real property, such as land, buildings, or cash, emotions should be set aside, and everything should be in writing. And this is when a gift deed can be handy. With this document, the donor is assured of the transparency and legality of the transfer and is protected from future disputes, whether you’re giving movable or immovable property. A clear understanding of how gift deeds work is important for both the donor and the donee.
Let’s look deeper at gift deeds, including what they are, why they are used, and when to use them, along with the required documents.
What is a Gift Deed
A gift deed is a document that allows an individual (the donor) who owns the property to transfer the title of that property to another person (the donee) without requiring any payment in return. The transfer has to take place out of love and affection. A valid document must be signed and registered under the Indian Registration Act 1908.
Unlike a will, which takes effect only after the death of the donor, a gift deed results in an immediate transfer of ownership. It is an effective tool to convey assets in a clear and legally binding manner during the donor’s lifetime.
Key Components of a Gift Deed
Below are some essential things that should be specified in the gift deed format:
- Donor and Donee Information
Full names, addresses, and identification of both the donor as well as the donee are to be typed on the documents.
- A Complete Property Description
It must contain a definition of the property to be gifted. Mostly things about location, like address, size, plot number, etc., and other identifiers to make sure what is actually referred to.
- No Monetary Consideration
A gift deed is different from a sale deed because nothing gets exchanged, i.e., there is no money involved in the transfer of this deed. This has to be specifically mentioned in the document.
- Free Will of Donor
The donor MUST say, without a shadow of a doubt, make sure to expressly state that the gift was given freely without your will. This is just so the deed is valid.
- Signature and Witness
Made the dealing donee accepts the gift. This acceptance must take place while the donor is alive and has the capacity to transfer ownership.
Advantages of a Gift Deed
Understanding what is involved in making the right decision when transferring property rights to another person. Some benefits of having a gift deed are as follows:
- Legal Confirmation
Registration of a gift deed achieves legal validation of the conveyance. It makes it documented and retrievable by the law.
- Instant and Effective Transfer
A registered gift deed provides for an instant transfer of ownership. It makes the donee the legal owner of the property without any delay.
- Tax Exemption
Gift deeds provide tax exemption. In some cases, like a gift to eligible relatives, the conveyance will not be taxed until a certain limit.
- Irrevocable Transfer
As soon as the gift deed is registered, the transfer becomes irrevocable in most cases. Therefore, it provides certainty and no cause for dispute in the future over ownership.
- Avoid Future Litigation
Proper registration of a gift deed reduces the likelihood of future litigation between heirs or third parties since the transfer has been registered legally.
- Concessional Stamp Duty
Most Indian states provide concessional rates of stamp duty on gift deeds executed in favour of close relatives, making it less expensive.
Types of Properties That Can Be Gifted
Gift deeds are generally classified based on the type of property being gifted and the nature of the transfer.
1. Movable Property
This type of deed is used when you want to transfer ownership of movable assets such as,
- Cash
- Jewellery
- Vehicles
- Shares and bonds
- Other tangible personal possessions
Although registering a gift deed for movable property is not always mandatory, doing so provides further legal security.
2. Immovable Property
This is the most common type of gift deed and is used for transferring ownership of:
- Residential property
- Commercial property
- Agricultural land
- Plots
For immovable assets, registration of the gift deed is compulsory under the Registration Act, and appropriate stamp duty must be paid.
Documents Required for Gift Deed Registration
Now that you know what a gift deed for a property is, let’s understand the documents needed for gift deed registration.
- The donor has to submit the original charity deed for registration.
- The donor and the donee must submit proof of their ID, such as an Aadhaar or PAN card.
- Documents like sale deeds or title deeds that prove ownership of the property being gifted.
- Photos of the donor and the donee are necessary.
- It would be required to witness during registration, so it is needed.
- Witness address proof is also required for both witnesses.
Stamp Duty Charges on Gift Deed Registration
| State Where the Gift Deed is Registered | Stamp Duty Charges |
| Uttar Pradesh | 5% (Rs 5,000*) |
| Haryana | 5% |
| Delhi | 4% |
| Maharashtra | 3% |
| Gujarat | 3.5% |
| Rajasthan | 6% |
| Madhya Pradesh | 5% |
| Andhra Pradesh | 2% |
| Himachal Pradesh | 6% |
| Tamil Nadu | 7% |
| Karnataka | 5% |
| Punjab | 6% |
| Bihar | 5.7% (for women) and 6% (for men) |
| Jharkhand | 3% |
| Kerala | 2% |
| Madhya Pradesh | 2.5% |
| Chhattisgarh | 5% |
| Uttarakhand | 5% |
| Himachal Pradesh | 5-6% |
| Odisha | 3% |
| Telangana | 0.5 % (subject to a minimum of Rs 1,000 and a maximum of Rs 10,000) |
| J&K | 3-7% |
| Assam | 5.6% |
| Chandigarh | 5% |
| Goa | 3%-6% |
| Manipur | 7% |
| Sikkim | 1% |
| Arunachal Pradesh | 6% |
Steps for Gift Deed Registration
- Drafting a Document: Include all details, such as the donor/donee, property or estate, and the signatures of witnesses.
- Stamp Duty Payment: You must pay the correct stamp duty for the flat at the location where the property is situated.
- Registration: Parties and witnesses must come to the registrar’s office to verify and register the deed.
- Issuance of Registration Certificate: After verification, the registrar issues the certificate, concluding the process.
Conclusion
Whether you are giving away a plot of land to your child or transferring shares to a sibling, having a well-drafted gift deed can prevent misunderstandings and potential legal battles—especially if you later need to cancel gift deed due to unforeseen circumstances
Please take legal advice before proceeding to understand the effects, stamp duty, and registration as applicable in your state. A gift deed can be an easy and safe way to transfer wealth if you have the right guidance to ensure your family benefits from it while you’re still around.