Unlike general property selling, some format of formats also involves no-money selling. Therefore, no monetary profit is earned by the seller. Such type of property sale can be termed a “Gift Deed”. This includes transferring the ownership from the owner to the other person without selling it to him/her. For instance, a gift deed for your blood relatives or a close friend.
This is done to present the movable or immovable property to some close relative. However, in most cases, such properties are gifted to grandchildren by their grandparents. We’ll be discussing what a gift deed is? What are the documents required for its registration? And how it is different from a Will?
Gift Deed for Your Blood Relatives – What Is It?
As already discussed, property ownership is transferred without involvement in monetary transactions in a gift deed. The property can be movable or immovable. Both of them are legally valid. However, for immovable property, one may have to register in court.
This is done to eliminate any chances of dispute in future regarding the succession of the property. A deed of gift is an agreement between the donor and the donee. This agreement declares that the property owner is gifting or donating the property to a family member or any other close person. Also, it does not intend any amount in exchange for that property. Therefore, the asset is gifted, not sold, to the person.
All the legal processes regarding the gift deed registration must be held at Registrar or Sub- Registrar’s office. Make sure that the office falls under the jurisdiction of the area where the property is located.
What Can Come Under the Category of ‘Gift’?
We are pretty clear about the fundamentals of the gifts. A gift can be an immovable or movable asset. The definition of the gift can be found in the Transfer of Property Act, 1882 (also known as TPA) in the Indian constitution. It is specified that gifting a property voluntary without any pressure or forceful action comes under a gift deed. The asset owner is the donor, whereas the person receiving the ownership is called the donee.
Land, mortgages, goods, shares, actionable claims, insurance policies and real estate properties are valid to be gifted. But the association of any minor in the whole procedure is completely prohibited. Moreover, the owner should be completely conscious while gifting the property.
He/she should be familiar with the possible consequences of the same. Hence, while gifting the property, two main requirements should be fulfilled. Firstly, both parties should be a majority, and secondly, the owner should be in a healthy state of mind.
However, a donee can be minor in some special cases. In such circumstances, the agreement can be made in the name of the natural guardians of the minor. His/her parents or guardians can accept the property on their ward’s behalf and a gift deed for your blood relatives.
Important Things to Mention in the Draft
The Draft for the gift registration should be designed and created carefully. It should adhere to all the laws and regulations mentioned in the constitution. One should mention a list of important clauses while formulating the agreement.
No Involvement of Money
Generally, a gift deed is considered a way to show love and affection for someone by gifting them property. Or, it can also be done for charity and religious purposes. No matter what the case, you should always mention that there is no intention to earn any monetary profit through it.
Specify the Owner
Whether it is anticipation or not, only a property title holder can gift it. Make sure to mention who owns the property and when it was purchased.
A Brief of the Property
Describe the property with its location and measurements, if possible. You may include any highway or major road around it to make the description more informative.
Relationship Between the Donor and the Donee
It is necessary to mention the relation between the donor and the donee. Many state governments relax the stamp duty if the donor and the donee hold a blood relation. Otherwise, it remains enduring to mention the relationship in the Draft.
Documents Required and Charges
For deed of gift registration, some documents are required to make the registry successful. These documents are as follows:
- One needs to generate the original first deed
- ID proof
- PAN (Permanent Account Number) card
- Aadhaar card
- Sale deed of the concerned property
- Any other document would also be required as per the different state government
These were some prominent documents you should have to complete the procedure. Some charges would be levied on you as registration fees or stamp duties. The rate for the same is different in the varied states. Even the basis of charges changes as you move from state to state.
In most scenarios, the owner is exempted from all the taxes and stamp duty if you are gifting property to an NGO. But it is still advisable to check if your state supports this regulation or not. One may hire a local lawyer to consult the same.
Gift vs Will – The Real Difference
The main difference between both methods of transferring property with a monetary transaction is that a Gift deed can be made during the owner’s life while a will can’t. An owner needs need to be dead to function the Will. Otherwise, the property can’t be given.
Another difference between both the same is the registration. No registry is required to claim the property if your name is mentioned in the Will. However, gift deed registration is required under the Transfer of Property Act, 1882 and Registration Act, 1908 of Section 17.
Various registration charges and stamp duties are involved during the deed of gift registration. But the Will is a bit cheaper. No registration charges have to be paid by the person claiming the property. Also, the deed of gift is governed by the Income Tax department of India, while the Will follows the Law of Succession.
Conclusion
Concluding, these were some key information that one should know. The state and central government schemes can avail several exemptions and relaxations. This can be done to save registration and stamp duty charges.
To smoothly register a gift deed for your blood relatives, the role of an advocate is always required. Vakilsearch connects you with the best lawyer who helps you register for the same and guides you throughout the process. Our services are affordable, accompanied by active customer care support. You can check out our website and mobile application to know more and book a personal lawyer for yourself.
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