Legal Guide

What is Stamp Duty on Gift Deeds in Blood Relation?

by Bhavya Choudhary · 3 min read

Stamp duty on Gift Deed in blood relation

Introduction 

  • Any immovable property can be gifted by the donor according to their wish. The property gifted has certain stamp duty charges and tax implications. 
  • The government imposed that the property that is being gifted does not include stamp duty on Gift deeds in blood relation or any family member.
  • Any kind of land transfer or flat being gifted is free from stamp duty.
  • This was waived to provide relief to the farmers who were in difficult situations because they could not afford the higher stamp duty on Gift Deed in blood relation to pass on their land or homes to their wives and children.
  • This step was initiated to provide sufficient support to the farmers and the middle class who couldn’t afford to pay stamp duty for their flats/property. 
  • The standard rate of stamp duty on Gift deeds in blood relations varied from 2% to 7%, which was under the state government. 
  • Any 500/- 200/- stamp paper will work as stamp duty on Gift Deed in blood relation as per ministry orders.

What is stamp duty?

  • When an individual makes a property transaction, stamp duty and certain deed registration fees must be paid to make the transfer legally valid.
  • If someone is planning to transfer the ownership of a property to a loved one or blood relatives, then drafting a Gift Deed and the registration will be the only process required. 
  • While gifting property to a friend of a non-family member, stamp duty is payable according to the circle rate as per the ready reckoner. These rates vary from one state to another.
  • Every state has its own set of regulations and rates for stamp duty on Gift deeds in blood relations. The deed registration process is mandatory and must be adhered to to make the transaction legal in the eyes of the Law.
  • A Gift Deed is done voluntarily to a loved one without any compensation in return. It can be any movable or immovable property or land.

Essential features of a Gift

The Gift Deed needs a few essential features to make it valid and valuable:

  • A transfer without any considerations.
  • The availability of two parties is the donor and the donee.
  • An existing property.
  • Acceptance and mutual decision of parties.
  • Property stamp duty and registration must be cleared.
  • Stamp duty on Gift Deed in blood relation must be paid.

Which Law governs it?

  • It is managed by the Transfer of Property Act 1882. This act states that a person can transfer an existing property to another individual only if they are the sole owner of a property. It is a valid gift transfer only if it is gifted without taking anything in return.
  • According to the Indian Registration Act, the transfer of any immovable property should be written and registered if its value exceeds Rs 100/-. 

Gift Deed Registration 

  • The registration of the deed of gift is very crucial irrespective of what is the total market value of the property. 
  • The required documents must be prepared with legal advice and signed according to the rules and regulations. 
  • The title ownership is transferred and hence should be proved by certain documentation such as property papers, sale deeds, ID proof, or POA, if any.
  • Valuation certificates and encumbrance certificates may also be required for some state registration. It is registered with the sub-registrar.
  • Two witnesses must be present to attest to the deed.

Stamp Duty on Gift Deed in blood relation

The stamp duty on Gift Deed in blood relation varies from state to state. It is not the same rate everywhere, and many factors can also affect the stamp duty on Gift Deed in blood relation. 

  • Karnataka- The stamp duty on Gift deeds in blood relation is Rs 1000/- to Rs 5000/- which depends on the location of the property being transferred. For non-family members, it is 5.6%of the total market value of land/property.
  • Maharashtra- The stamp duty on Gift Deed in blood relation is 3%. For relatives and non-family members, it is 5 %. If a residential property or any agricultural land is involved, then only Rs 200 is paid. 
  • West Bengal– The stamp duty on Gift Deed in blood relation is 0.5%. For non-family, it is 6%. The surcharge is 1% above Rs 40 lakhs.
  • Tamil Nadu- The stamp duty on Gift Deed in blood relation is 1%. For non-family members, the charges are 7%.
  • Punjab- The stamp duty on Gift deeds in blood relation is 0. In other cases, it is charged at 6% of the total market value of the property. 
  • Rajasthan- The stamp duty on Gift Deed in blood relation is 2.5%. Whereas it is 4% for other cases. 

Factors affecting Stamp Duty on Gift Deed in blood relation and Non-blood relations

Some factors affect stamp duty on Gift deeds in blood relation and non-blood-related rates in every state. These are as follows:

  • Location: Each state has a different stamp duty rate and requirements. Municipal area rates are higher than those of residential areas. 
  • Payment: The stamp duty payment must be paid in full to register the deed legally.
  • Transfer purpose: The reason for which the property is being transferred also plays a vital role in determining the stamp duty rates in a state. Commercial buildings have higher rates.
  • Type of Property: New property or building can attract high stamp duty on Gift Deed in blood relation compared to older buildings.
  • Legal documentation: The document used to print the Gift Deed should be a legitimate legal document, as it will be registered only after verification. 
  • Age of the Owner: Consideration of the owner’s age is possible as, for senior citizens, the stamp duty on Gift deeds in blood relation is lower than those for younger ones. The government chose to subsidize the charges to provide some relief to seniors.
  • Gender: The government allows some concessions to women if the property is registered in their name. 

Conclusion 

The blog discusses the stamp duty on Gift deeds in blood relations. The stamp duty and registration charges are to be taken care of properly for the validity of the Gift Deed. The legal regulations are in place to ensure that tax cannot be exempted with the help of the gifted property. 

Drafting a Gift Deed can be complex and hassle for some as much documentation is required and reviewed. Taking legal advice or consulting with a lawyer will ensure proper property transactions.

Bhavya Choudhary

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Bhavya Choudhary

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