- When an individual gifts a property voluntarily, they print the Gift Deed on non-judicial stamp paper to register it. The registration fees are paid with the Gift Deed stamp paper charges to make the Gift Deed legally valid. The donor clears the stamp duty in most cases.
- The donor and donee can also decide that each party will pay half of the stamp duty and registration charges.
- The gift is given out of love and appreciation, so the donor clears every liability related to a property before gifting it to a family or non-family member. It is gifted without taking any monetary benefit from the recipient. The deed is registered to make it legally valuable and enforceable.
- The deed of gift cannot be revoked until there is a termination clause in the Gift Deed or there is evidence of fraud, duress, coercion, or undue influence. Sometimes gifting property is done to escape tax liabilities. However, several legal rules and regulations are present to control the gifting of movable or immovable property.
The requirements for a valid Gift Deed
As per section 122 of the Transfer of Property Act, stamp duty on Gift Deed stamp paper and income tax charges are paid in full. The registry is a crucial step and is done with the sub-registrar, with the help of a lawyer, or the donor can seek legal consultation to arrange a Gift Deed stamp paper.
To make a Gift Deed valid, several requirements are complied with. These are as follows:
- The transfer of ownership of property is not valid until the Gift Deed is legally registered. Registration makes it valuable in the eyes of the law.
- The charges are paid for the Gift Deed stamp paper.
- As per section 17 of The Indian Registration Act, 1908, it is compulsory to get the deed of gift registered with the sub-registrar of the concerned district.
- The registrar verifies every document provided and makes sure that the Gift Deed stamp paper charges have been cleared properly and are affixed to the document when it is provided for the registration procedure.
- Any additional documents will be needed, such as the title of a property, etc., to prove ownership of the property.
- The Gift Deed stamp paper charges and registration are set at standard rates in some places; various states allow concessions regarding the individual receiving the property.
- The Gift Deed stamp duty charges are lesser when giving a gift to family members. It is not the same for relatives or friends. Some exemptions are made for genders too. In some states, females have a lower percentage of Gift Deed stamp paper charges than males.
- For Example: In Delhi, the Gift Deed stamp paper charge for females is 4%, and for males, it is 6%.
All these factors play a vital role when determining if a Gift Deed is legally valid.
Gift Deed Stamp Paper and Legal Provisions
- In India, The Indian Stamp Act of 1899 governs the rules related to Gift Deed stamp paper charges and provisions. The Gift Deed stamp paper charges are usually different for every state, ranging from 2% to 7%.
- It also depends on the location, structure, and age of the property, and the original copy of the property paper is required to prove the factual requirements.
- The State Government has the responsibility for charging and collecting the stamp duty charges in India. It is paid on a Gift Deed stamp paper. The charges are paid during any property transactions and transfers.
- A physical stamp is impressed with the document that ensures that the transactions are made under legal supervision and tax has been paid.
The essential factors while paying stamp duty charges.
Stamp duty charges depend on a lot of factors. They are as follows:
- Property Location: The Gift Deed stamp paper charge is different in every state. Some states also have concessions for families and non-family, males and females. This difference should be considered while paying for a Gift Deed stamp paper registration.
- Paid in full: The charges for Gift Deed stamp paper are to be cleared in full so that the sub-registrar can verify payment and process the registration.
- The type of property: The property in commercial areas has higher rates of Gift Deed stamp paper than those in residential areas.
- Necessary documents: The Gift Deed stamp paper and other necessary documents should be legitimate and must be signed by the donor. Two witnesses must attest to the same documents. Property papers must also be needed to prove ownership of the donor.
- Building age: The Gift Deed stamp paper is charged at a higher percentage of new buildings rather than old ones.
- Donor’s age: Senior citizens are allowed a subsidized Gift Deed stamp paper.
- Gender: Women are also allowed concessions if the property is in their possession.
How to Clear Stamp Duty Charges?
The state government collects the stamp duty charges on Gift Deed stamp paper in three ways:
- Stamp paper: The registration authority directly collects the stamp charge that is executed on non-judicial stamp paper. The parties must mention every term and condition along with the necessary clause requirements. The signatures of both parties are a must. The details of the transaction between the stamp vendor and buyer are stated on the back of the Gift Deed stamp paper.
- Electronic stamping: It is introduced by the government to eliminate fake stamping and make the stamping process easy and convenient. A dedicated website helps to pay the Gift Deed stamp paper charges.
- Franking: Some authorized banks have a franking center. The documents are prepared with legal consultation and taken to the bank for getting the physical stamp affixed.
The blog discusses Gift Deed Stamp paper charges. Paying taxes and stamp duty is very crucial during any property transactions. This method requires a lot of documentation and knowledge about the provision related to property acts.