Can I Revoke A Gift Deed?

9 May 2023

7,372 4 minutes read

If you want to grab information about deed clauses, you must read this guide that reveals all the details about the deed and its clauses.

A document is known as a “gift deed” when it is used by the owner of moveable or immovable properties to transfer ownership of that property to another party. The Transfers of Properties Act, 1882 governs property transfers made as gifts in India. For such a gift to be legally genuine, the donee should accept it within the donor’s lifespan.

Table of Contents

What Has To Be In A Gift Deed Format?

The immovable property would be transferred once it has been registered with the proper registrar or sub-registrar. When the item is delivered, the gift of movable property takes effect. The property should be given voluntarily by the donor to a donee without any expectation of reward.

Major Clauses in a Gift Deed

It should always include names, addresses, and information about the relationship between the donors and donee.
A gift deed must clarify that perhaps the donor is giving the gift property to a donee out of care and devotion and that no other considerations other than those of a personal nature are involved.
The gift deed must state that the giver is free and voluntarily giving the donee custody of the gift property. No threats, pressure, or harassment are allowed during the transfer.
An official document known as a deed of gift certifies that such a donor has given the donee a gift and has given them possession of a given property. The existence of a property and the donor’s ownership of it should be acknowledged in the donation document.
It should have included detailed information on the gift properties.
The rights of a donee, such as the rights to use the item in peace and to sell, mortgage, or lease it, should be mentioned in the deed.
The donee’s acceptance of the property donation should be mentioned in the gift deed. Suppose there is a disagreement regarding whether the present was designed to be provided by mail or post and is wholly or partially owned property. In that case, a deed of gift must reference the intention to transfer the property to the person who gave the gifts, either expressly or implicitly.
The names and addresses of the witnesses must be included in the gift document. A minimum of two witnesses must sign it and acknowledge their presence.
A revocation clause for the gift properties does not necessarily need to be included in the gift deed, but that is recommended to prevent future disputes.

Gift Deed Registration

Immovable property can only be given legally through a registered deed approved by the donor and the donee and witnessed by two others. It should be executed during the donor’s lifetime, per Article 123 of the Transfer of Properties Act, 1882.

A recorded gift deed or physical delivery of an item to the donee are acceptable ways to make a gift of property. The donors and one should sign each page of the gift deed, and at least one or two witnesses should testify to their signatures.

State-by-state variations exist in the cost of the prescribed form used to perform the deed of gift. The property to also be gifted is located under the jurisdiction of a Registrar or Sub-office Registrar, where the deed should be registered. Regarding property transfers, the Registrar/Office Respecter has jurisdiction over the donor’s residence.

The Documentation Needed to Register a Deed of Gift

The actual gift deed, ID documentation, a PAN card, an Aadhar card, the selling deed for the property, and other related papers must all be presented.

Income Tax on a Gift Deed

Gift deeds must be reported on income tax returns (ITR). The 1958 Gift Tax Act was repealed in 1998 and only reinstated in 2004. For instance, if the consideration is Rs 1.5 lakh and the stamp duty is Rs 4 lakh, the distinction between the two is greater than Rs 50,000.

If the stamp duty rate of the gift exceeds Rs. 50,000 and it has been received without real consideration, giving property like a deed of gift may be subject to taxation. If they pertains to immovable property valued at more than Rs. 50,000, they may be required to pay tax. The list mainly contains the partners of the people mentioned above.

The first tax incident will occur if a relative gave you the home as a gift when they sold the property. Any previous owner’s price paid for such property will be considered an expenditure for income tax purposes.

When they sell property, the first taxation occurrence will happen. The gains must be classified as either short-term or long-term. You will benefit from indexation at that price and have the option to exclude yourself from paying capital gains tax if the holding term is much more than 36 months.

The profit accumulating on the sales of such properties would be considered short-term and contributed to your ordinary income, where it will be taxed at the appropriate slab rate, whereas if the holding period, even though calculated above, is shorter than 36 months, it will be excluded from the calculation. It will be treated as if it were by purchasing a residential property, RICE, or NHAI capital appreciation bonds.

Charge for Gift Deed Registration

The registration fee for gift deeds is the same as it is for most deeds involving the exchange of property. Most states levy a standard fee, while others charge a deed service equal to 1% of the property.

In Delhi, the charges are 6% for men and 4% for women.

In Haryana, the stamp duty on deed of gift is 5%, on sale or conveying deeds is 7%, and on an exchange, deeds are 8%.

In Haryana and Maharashtra, there is a stamp duty fee of Rs. 100 and Rs. 200 when giving residential or agricultural land to the surviving spouse, child, grandchild, or wife of a deceased son. The cost of stamp duty varies between Rs. 150 and Rs. 300 in rural regions.