What is the meaning of Gift Deed?
A gift deed, like a sale deed, contains information on the property, the giver, and the donee. The gift deed is not concerned with financial transactions since it simply transfers ownership to the recipient.
Gift deed registration must be done to enforce it in the Court of law.
Illustration of the Statute
Individuals are required by Section 17 of the Registration Act of 1908 to register gift deeds with the sub-registrar. In addition, section 123 of the Act states that a non-registered gift deed is void.
In addition, the registered gift deed holder is responsible for applying for the property’s transformation. The mutation procedure is an integral component of the real estate industry, which promotes the transferability of utility connections in favor of the beneficiary. In order to transfer the property, the beneficiary must provide a registered gift deed.
Procedure for Gift Deed registration
Instructions for Gift Deed registration are as follows:
- A trained expert will examine the property associated with the gift deed.
- The donor and the donee will sign a gift deed in the presence of two witnesses.
- Submit the signed documentation to the sub-registrar closest to you.
- Take legal consultation to calculate the Gift Deed Registration Charges, including stamp duty. You must pay the required Gift Deed Registration Charges.
- Fees associated with the Gift deed registration must be paid.
- Stamp duty and registration fees are required for gift deed registration and should also be paid.
- In India, the state government decided on the registration fees for gift deed registration similarly to sale deeds. Prior to determining the gift deed registration cost, the market value of the given property is used to establish its worth.
Documents Required for Gift Deed Registration
Gift Deed Registration takes place at the office of the Registrar or Sub-registrar. To register a Gift Deed, however, significant identification and property papers are necessary, including:
- Original Gift Deed
- ID Proof such as Aadhaar Card, Driving License, among others
- PAN Card of both donor and donee
- Evidence of the donor’s ownership, such as a sale document or title deed
- Passport-size picture
- Identification and address proof of witnesses
Steps for Gift Deed Registration
In India, the gift-giving procedure is divided into three categories. To make things simpler for you, we shall handle each component separately.
- Drafting a gift deed
Creating a gift deed is the first step in the giving procedure. Given that he/she is responsible for creating the gift deed, the presence of a lawyer is crucial. Typically, the draft includes information on the potential transferee and the asset to be transferred. It is important to highlight that financial transactions should not be conducted through gift deeds.
- Acknowledgment of the Property
According to the relevant legislation, the donee must take property from the donor throughout the donor’s lifetime. If the donee does not accept the property from the giver, the gift deed becomes ineffective and void.
- Gift deed registration
According to section 123 of the transfer of property statute, an unregistered gift deed cannot under any circumstance be considered a legitimate instrument. Two witnesses are required to testify to the gift-giving procedure.
What may be given as a gift?
- The gift deed must specify the existing moveable and immovable property;
- The nature of the gift deed must be palpable and transferable.
Advantages of a Gift Deed registration
- Deed over a Will The section that follows describes the benefits of a gift deed over a will.
- A gift deed is completed after the recipient, and the donor agree on the transfer; in contrast, a Will is enacted after the death of the property owner.
- A will permits the owner to pursue legal action in the event of a disagreement, but a Gift Deed registrationis free from litigation. Legal action can be taken by taking legal consultation.
- The transfer of property under a gift deed is not subject to taxation.
Disadvantages of a Gift Deed registration
This list demonstrates the disadvantages of a gift deed vs. a Will. These are as follows:
- After execution, a gift deed cannot be revoked, but a will is mutable and may be changed as often as possible as long as the owner is alive.
- Gift deed registration incurs extra stamp duty fees. The obligation varies from state to state.
Can a gift deed be revoked?
Yes! A gift deed may be revoked. Section 126 of the Transfer of Property Act of 1882 regulates the revocation or cancellation of a gift deed. According to this statute, a gift deed may only be canceled under the following circumstances:
- When an agreement between the donor and the recipient stipulates that the gift deed must be withdrawn. The gift deed cannot be withdrawn at the donor’s sole discretion. The gift deed that the giver unilaterally canceled is null and invalid.
- A gift deed may be canceled in the same way as a contract, with the exception of non-payment or consideration failure.
- A gift deed may be revoked in whole or in part.
The aforementioned reasons cannot be used to cancel a gift deed. It must be emphasized that a deceased donor’s legal heirs might cancel the gift deed on his or her behalf.
Remember that the gift deed is not for minors. The regulations prohibit children from entering into contracts; hence, they cannot transfer property to another party. In this situation, however, the identical legislation has a distinct proposal for the donee.
If the recipient is a minor, his/her legal guardian might receive the present on his/her behalf. Until the donee becomes an adult, the guardian will continue to follow the Procedure for Gift deed registration and assume all obligations as the property’s owner.