What is the validity of a Gift Deed?

by  Adv. Priyanka Sampathy  

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3 mins

  

Validity fo gift deed

Introduction

A Gift Deed is legally valid only if the deed is registered with a sub-registrar. The stamp duty and registration fees must be cleared, and both parties must sign the required documents for the validity of a Gift Deed.

Real estate is the most sought-after investment for any individual. A person may choose to give land or property to a close one. The property can be movable or immovable. However, to make a gift valid, an immovable property Gift Deed must be registered as per the law.

What is the meaning of a Gift Deed?

A Gift Deed is the voluntary transfer of property ownership from one person to another. The property can be movable or immovable and is free from any monetary exchange. A gift is made out of love and care for another person. 

The gift must be accepted by the donee. The validity of a Gift Deed becomes void if the donee passes away before receiving the gift.

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Who can make a Gift Deed for the property?

An individual who is the owner of a property can make a Gift Deed.  

However, some factors affect the validity of a Gift Deed which are to be considered when gifting a property. These are:

  • The donor should be the sole owner of the property. It means that ancestral property or future inheritance cannot be gifted.
  • The donor must be above 18 years old and should be mentally sound, as it affects the validity of a Gift Deed.
  • There should be a voluntary transfer without any involvement of a third party. No fraud, duress, coercion, undue influence, and threat should be involved while making a Gift Deed.
  • The donor must not expect any money or compensation in return. The donor should make a Deed of Gift out of affection.
  • Only tangible properties can be gifted. 
  • The property must be an existing property. 
  • The donee must accept the gift.
  • A minor can be a donee, and the guardian can receive gifts on their behalf.

Registration of the Gift Deed is mandatory. 

  • As per section 123 of the Transfer of Property Act, any gift that involves an immovable property must be registered to make it of legal value.
  • The stamp duty charges and registration fees must be cleared to register the deed of gift.
  • The validity of a Gift Deed is void if there is no written document formatted for gifting property.
  • The title cannot be proved without the written instrument.
  • The size of the property does not alter the validity of a Gift Deed. The land/property gifted can be of any value and size. It is required to get the Gift Deed attested by two witnesses. 
  • The draft is made following the validity of a Gift Deed and registered with the concerned sub-registrar.

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Termination of a Gift Deed

The validity of a Gift Deed is never altered in any way unless there are some susceptible points:

  • There is evidence of undue influence, pressure on the donor to make a Gift Deed, fraud, threat to the donor, and harm in any way.
  • The donor and donee mutually agreed to revoke the Gift Deed at a point in the validity of a Gift Deed.
  • The parties gave their mutual consent to add a revocation clause in the Gift Deed according to their requirements. 
  • The Gift Deed can be challenged in a court of law by filing a civil suit only.
  • The deed can be nullified, and the validity of the Gift Deed becomes void if it is found that the donor is not the legal owner of the gifted property. 
  • It can be challenged if the stamp duty and registration charges are not properly cleared.

Other than these factors affecting the validity of a Gift Deed, it cannot be nullified.

These circumstances and the validity of a Gift Deed are to be considered when the deed is challenged in a court of law. The donor or donee must seek legal consultation while making and receiving a Gift Deed to avoid unnecessary complexity and complications.

Duration of the validity of Gift Deed

  • When the donor gives an immovable or movable property through a Gift Deed, it is valid forever.
  • It can be terminated only in special circumstances that are noted above in this article.
  • The validity of a Gift Deed is not affected even if the donor passes away instantly after gifting the property.
  • The law provisions and regulations state that the validity of a Gift Deed cannot be altered by any means once the Gift Deed is signed and registered. It comes into effect immediately. The proper criteria need to be followed so that they cannot be challenged by a third party.  

Charges for gifting a property

To successfully register and gift property, the stamp duty and registration fees should be cleared as it thoroughly applies to the validity of a Gift Deed. The stamp duty is the same as the sale deed in some states. However, there are different stamp duty charges for every state.

The authorities and the government offer concessions in some states for gifting property to blood relatives. 

Example:

  • Delhi- 4% women and 6% men.
  • West Bengal- 5% for non-family members and 0.5% for family.

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Conclusion

The Gift Deed is common nowadays for gifting a property. The donor does not accept any money in exchange and clears the stamp duty and the necessary registration charges. The validity of the Gift Deed depends on its registration. It is of legal value when registration is done by the concerned Sub-Registrar. Both parties are highly advised to take legal consultation to draft a Gift Deed in a timely and secure way.

The primary goal of gifting is to help or show affection without consideration. There can be complex documentation and regulations which may not be easily accessible to an individual. One must consult a lawyer to get the Gift Deed drafted.

Adv. Priyanka Sampathy

Adv. Priyanka Sampathy

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Priyanka Sampathy is a legal consultant who prioritises ethical and professional conduct while striving to achieve desired outcomes. With over 15 years of independent practice, she has significant expertise in handling legal cases. Her exceptional communication skills enable her to express arguments in a clear and persuasive manner, both in writing and verbally, in Hindi, English, and Telugu.

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