Legal Guide

What is a gift under the Transfer of Property Act?

by Bhavya Choudhary · 4 min read

gift under transfer of property act

Did you know that gifts are one of the legally authorized methods of transfer of property? In this blog, we will examine the essential requirements that must be met for a grant under the Transfer of Property Act to be legal and genuine.

The notion of transfer of property is not new; it has always been an integral element of our civilization. For the sake of brevity, there are two forms of property transfer: inter vivos and testamentary. 

Inter vivos property transfer occurs when both the donor and recipient are alive. Section 5 of the Transfer of Property Act does not apply to testamentary transfers; hence only inter vivos transfers are deemed gifts under the Transfer of Property Act. In addition, where both parties are Muslims, the legislation governing facilities is governed by Islamic law and not the Transfer of Property Act.

Definition and key aspects of the term gift under the Transfer of Property Act

The definition of a gift under the Transfer of Property Act is the transfer of an existing moveable or immovable property from a donor to a donee without consideration while the giver is alive and competent to provide it.

The definition of gift under the Transfer of Property Act reveals the following fundamental components:

The transfer of ownership

  • The owner of the property must transfer all rights in the property when transferring it to the donee.
  • However, conditional gifts under the Transfer of Property Act are permissible so long as they do not contradict the restrictions outlined in sections 10-34 of the Act.

Existence of property

  • The property that the donor wishes to transmit as a gift under the Transfer of Property Act must exist at the moment of the transfer. 
  • The property may be either mobile or immovable. According to Section 124 of the Act, the transfer must be of an existing asset or it would be invalid. 
  • In addition, there is a point to be made about the future property. The gift under the Transfer of Property Act of future property is invalid, and in the event of both current and future property, the gift under the Transfer of Property Act is invalid concerning the future property.

The transfer must be gratuitous and done willingly

  • This is the most essential aspect of making a gift under the Transfer of Property Act, without which the whole purpose of the gift under the Transfer of Property Act is undermined. 
  • The giver must offer the gift under the Transfer of Property Act with his full knowledge and permission. The gift under the Transfer of Property Act shall be void if received via force and undue influence, as specified in sections 15 and 16 of the Indian Contract Act of 1872. 
  • In such cases, the courts are required to apply two tests: whether one party is in a position of dominance over the other and if such a position has been utilized to control the will, i.e., has the person exerted undue influence over the other individual. 

The donor must be a competent person

  • The donor is the individual who desires to make a gift under the Transfer of Property Act of the property. Consequently, he must be of his kind. He must have reached the age of majority, be of sound mind, and not be in any way disqualified. 
  • Even Section 7 of the Transfer of Property Act specifies that only a competent individual may transfer property. 

The recipient of the gift must accept the Gift under the Transfer of Property Act

  • Another need for a legitimate gift under the Transfer of Property Act is that the recipient must accept it.
  • If the recipient dies before accepting the gift under the Transfer of Property Act, the transfer is null and void. 
  • Additionally, the acceptance must occur within the donor’s lifetime while he can donate. The recipient may accept the gift either explicitly or implicitly.

Transfer of ownership

  • As previously noted, the property might be either movable or immovable.
  • If the property is immovable, it is not essential to establish that it has been given. It is sufficient to demonstrate the recipient’s acceptance. 
  • For the conveyance of immovable property, section 123 requires a registered document signed by or on behalf of the donor in the presence of two witnesses, but the conveyance of moveable property may be accomplished either by a registered instrument or by delivery.

Types of Gifts under the Transfer of Property Act

Now, let’s examine the various forms of transfers that are considered gifts under the Transfer of Property Act. The following types of gifts under the Transfer of Property Act are permitted:

Void gifts

  • Although it is referred to as a void gift under the Transfer of Property Act, it is not a genuine gift under the Transfer of Property Act.
  • If a gift under the Transfer of Property Act is made for unlawful purposes (section 6), if it is contingent upon a condition whose fulfillment is impossible or prohibited by law, if it is made by an incompetent person, if the transferee dies before accepting the gift under Transfer of Property Act, or if the gift is for both existing and future property, the gift for the future property is void.  
  • Thus, it is correct to assert that void gifts are an exception to the rule of precisely defining what is included in the idea of gift under the Transfer of Property Act.

Onerous gifts under the Transfer of Property Act

  • Gifts under the Transfer of Property Act that are burdensome are addressed under Section 127. These are gifts that come with a burden or duty linked to the property.
  • It is founded on the idea that whoever gets a benefit must also shoulder the burden. 
  • To constitute an onerous gift under the Transfer of Property Act, there must be a single transfer of several properties, one of which is burdened with particular responsibilities while the others are not, and the transferee must comply with the burdened property to obtain all of the properties.
  • To put it simply, he cannot free himself of the load and acquire the remaining assets.

Conclusion

The notion of gift under the Transfer of Property Act is an ancient idea that progressively evolved into a distinct aspect of property law. The Transfer of Property Act of 1872 is a comprehensive statute that governs the laws, regulations, and processes pertaining to the transfer of immovable property through gift.

The gift deed must be registered and to get the gift deed registered one must consult a lawyer online. Apart from saving time, consulting a lawyer online will help you to get your gift deed registered efficiently. 

To get the gift deed enforced in the Court of Law, it must be registered.

Bhavya Choudhary

Written by

Bhavya Choudhary

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