Several clauses are vital in a Gift Deed draft and must be pertained to accordingly. It is valid under the Transfer of Property Act 1882, where the Gift Deed is of legal value only if the Gift Deed draft is established with the components deciphered by law.
The Transfer of Property Act 1882 states that the Gift Deed is a document of legal value that transfers property (movable or immovable) from one person to another. It is done without any monetary exchange between the parties involved. The registration process makes the deed of gift legally valid.
What is a Gift Deed?
A Gift Deed is a document that holds a legal value and is made to voluntarily transfer immovable or movable property to a family or non-family member out of love or affection. It can be any property of which the individual wishes to transfer ownership.
- The property must be under the donor’s ownership only, and no other individual should have a part or share of the gifted property. To register a Gift Deed, a Gift Deed draft is formerly made to ensure that all the components are thoroughly mentioned. Any changes can be made later on before the final process of registration.
- The Gift Deed draft ensures that the terms and conditions can be mutually agreed upon before making it legally valid. The chances of any disputes in the future regarding inheritance or succession can be avoided by making a Gift Deed draft.
- In case of complications, the parties can receive assistance through legal consultation, which will educate them thoroughly regarding the process.
- Any immovable or movable property can be gifted as long as the donor is the sole owner of the possession.
Parties involved in a Gift Deed
There are two parties involved, and the same must be mentioned in the Gift Deed draft also,
- The individual who transfers the ownership is the donor.
- The individual who receives the transfer is the donee.
A Gift Deed draft must elaborately contain their details to promote efficient processing.
Validity of Gift under The Transfer of Property Act
The property can be gifted if these factors are considered and followed accordingly under the Transfer of Property Act 1882. They are as follows:
- The property being gifted must be an existing property.
- The donor must possess a clear title of ownership of the property is granted.
- The Gift Deed and Gift Deed draft must be free from fraud, forceful transfer, coercion, or forgery.
- The transfer is made voluntarily.
- The property being transferred must not be done with any monetary exchange between parties.
- The donee must accept the gift of immovable property, and the same must be mentioned in a Gift Deed draft also.
What are the components of a Gift Deed draft?
There are a few components essential to making a Gift Deed draft. It is done per law provisions and established in the Gift Deed draft. The components are as follows:
- Property description: the property which is being gifted by the donor must be mentioned in detail in the Gift Deed draft. The details mentioned include property size, structure, construction date and details, area, location, and address.
- The donor is the sole owner: The Gift Deed draft must contain a clause where it mentioned that the donor owns the property with a clear title and no forgery is involved. He/she should be the sole owner of the existing property.
- No monetary exchange involved: The Gift Deed draft must establish that the gift was made without any compensation in return and that it was done out of love and affection to either family, friends, or relatives.
- The relationship between the parties involved: It is necessary to mention the relationship between the donor and the donee in the Gift Deed draft. If the parties are blood-related, the government can offer an allowance for the stamp duty charge. There is also a concession difference for men and women in some states as the percentage varies from one state to another.
- Liabilities and conditions: A Gift Deed draft may or may not have a conditional clause where the donor can attach liability on the resale or lease of property gifted. This can also be decided by the mutual consent of both parties.
- Delivery: This clause in the Gift Deed draft establishes the expressed action of the delivery of the possession of any movable or immovable property.
- Termination clause: the donor can add a revocation clause in the Gift Deed draft to establish the termination in the future if they want to. For the clause to be added to a Gift Deed draft, both parties must have mutual consent and then mention the clause of revocation. The parties can take legal consultation to understand this clause better because it is a crucial part of the deed.
- The witnesses: During the signing of the Gift Deed draft, both parties must be present with one witness each to attest the document for registration. The witness attestation process helps make it valid legally.
Essential Steps Required For Drafting A Gift Deed
The following way is used to draft a Deed of Gift:
- The place and date must be stated at the top of the Gift Deed to notify when it is going to be executed.
- The necessary information and details of both parties must be mentioned in the Gift Deed draft. Their address, name, profession, and other details with identity proof documents such as PAN, Aadhar, or passport/driving license.
- State the property details in a brief explanation in the Gift Deed draft to help in the verification process.
- The Gift Deed draft final copy must be printed on stamp paper after paying the complete charges regarding it.
- The registration is done with the Sub-registrar.
The Gift Deed is used for the voluntary transfer of ownership from the donor to the donee that can be legally valid only if registered. The exchange is done without any consideration. The donee must accept the property title and ownership after the registration process is completed.