Know How gift deed Can be Used for Cash

Gift deeds are usually seen as a way to transfer property, either movable or immovable, from one party to another. However, it is also possible to use a gift deed for cash transfer. Moving large sums of money from one person to another would incur many ancillary fees, which is why it is smart to use a gift deed for cash if you want to transfer large sums. Drafting a gift deed for cash transfers is a perfectly valid option.

Points to remember about gift deed for cash

• The Transfer of Property Act of 1882 is the definitive legislation on deeds for transferring property.
• Chapter VII of this Act discusses gift deeds, and this Chapter explicitly allows using a gift deed for cash. Illustration B of Section 126 contemplates a situation where a person gifts another person Rs. 1 lakh using a gift deed.
• As the Transfer of Property explicitly mentions a gift deed being used to transfer cash, it is safe to say that a gift deed can indeed be used for cash.
• Amounts up to Rs. 50,000 are non-taxable. If the value of the gift, or the value of money transferred in case of gift deed for cash, exceeds Rs. 50,000, you are liable to pay taxes for the transfer.
• In case of giving a gift deed for cash to a person within your family, the gift deed for cash will be non-taxable. However, the definition of “family” varies from State to State, so consider taking an attorney consultation to find out more about your State’s provisions.
• A gift deed for cash is unique as compared to other gift deeds as there is no requirement to pay stamp duty for the gift deed for cash. Additionally, registering the document is not compulsory either, although parties may register their gift deed for cash for extra legitimacy.
  

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Contents of a gift deed for cash

• Details of both of the parties: The gift deed for cash outlines the details of the parties involved in the transaction. Their names, ages, and addresses are recorded in the gift deed for cash. The deed would also specify the relationship between the person who is gifting the property and the person receiving it.
• Details of the property being gifted: The gift deed for cash will include the value of the sum that is being transferred, the method of payment, and other specifics about the gift.
• Lack of consideration: The lack of consideration clause specifies that the gift is being given without any transfer being made in exchange. A gift deed is a gratuitous form of exchange. This means that there is no consideration of any form being given in exchange for the cash being transferred, and the amount is transferred out of love and affection. Consideration is not required for the gifted property.
• Rights and liabilities: The gift deed for cash explains the rights and liabilities of both parties.
• Delivery clause: The delivery clause explains how the party that is gifting the cash will deliver the cash to the receiver of the gift.
• Revocation of gift: A gift deed for cash states the possible grounds for revocation of the gift. The grounds that are available to all parties for the deed to be revoked, regardless of its inclusion in the revocation clause, are the mutual consent of both parties or termination of the contract between the two parties.
  

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How to register a gift deed for cash

Although it is not strictly necessary to register a gift deed for cash, a registered deed has additional authenticity, and its legitimacy cannot be questioned in a court of law. Registering a gift deed for cash has the following process:

1. Create a gift deed: Get a gift deed for cash drafted by a verified lawyer.
2. Get witnesses’ signature on the deed: Gift deeds require two witnesses to attest to the document’s authenticity and that the parties signed the deed of their own free will.
3. Discuss your needs with a lawyer: Schedule a call with a lawyer to explain what you need from the gift deed for cash. The lawyer will be in a position to give you more information about the registration process and intimate you as to whether there are any further formalities to be dealt with.
4. Schedule an appointment at the Sub-Registrar’s Office: Choose a date and time to get your gift deed for cash registered at the Sub-Registrar’s office.
5. Pay registration fees at the Sub-Registrar’s Office: Pay the necessary registration fees, which would vary based upon the amount of cash being gifted.
6. Present relevant documents at the Sub-Registrar’s Office: Present the required documentation, which includes the original deed, passport-size photographs of both parties, as well as the witnesses, the donor’s PAN card, and other relevant documents.
7. The Registrar will officially record your deed: Once all the other steps have been completed, the Registrar will record your deed, which gives it legal authority.

Benefits of registering a gift deed for cash

• Legalize the process of gifting: A gift deed encloses details regarding property and the candidates involved in the agreement, leaving no scope of dispute that may arise in the future.
• Acts as Legal Proof: Getting a gift deed registered enhances the legitimacy of the transfer and can be used in case of a conflict.
• Tax Exemption: Registered gift deeds are exempted from certain taxes in some scenarios.
  

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Conclusion

A gift deed can indeed be used to transfer cash. For drafting a gift deed for cash, it is best to consult an experienced property lawyer. Such a lawyer would be well-informed on the intricacies of property law and would be able to assist you in the drafting process, as well as in actually executing the gift deed for cash.

Although registering a gift deed that transfers cash is not necessary, registering a deed adds to its legal authenticity and allows you to use the deed in courtroom proceedings without its validity being questioned. Although the process may seem long, complicated, and not worth the effort, it is a small investment that could pay dividends in the future when you really need it to.