Transferring your property through a deed can be a technical process. This blog will help you to understand deed transfers and what the conditions for deed transfer are!
A real estate owner can use a deed to give a gift to a colleague, close relative, or charity. Preventing inheritance disputes is as simple as putting this documentation into practice. When two people agree to transfer property without any money exchange, a legal document outlines precisely how the property will be shared.
Section 17 of the Registration Act, 1908 stipulates that the facility must be registered with the sub-registrar before the landowner can transfer it to another person or organization; nevertheless, the recipient must receive a gift while the donor is still alive. It’s common practice to include information about both the assignor and the recipient in a deed of gift.
Eligibility for Obtaining the Deed
The donor must properly document a gift deed. Under the law, minors cannot be recipients of charitable acts. Where a natural custodian is nominated to assist in asset management, although the donee is not yet of legal age, the exception to this provision can be made. For the asset to be genuine, the beneficiary must also be alive.
A donation deed must have the following elements:
- The date and location of the deed’s recording
- Donor’s name, date of birth, father’s name, and location
- Name, date, place of birth, and relationship to the donor of the receiver.
- Information about the recipient.
- In this scenario, the donor-donee relationship is in place.
- The description of the asset that was provided
- Identification of the gift’s giver and recipient.
- The names of the testimony who witnessed the transfer of the property.
- Witnesses’ signed declarations that their signatures are authentic
An attorney drafts a formal document that details the real estate transfer. Information on the new employee should be included in this document. As a general rule, relocations should be nonviolent and agreeable.
- Acknowledgment of the agreement
Acceptance of a gift transfer is only complete if the recipient gets the property while the giver is still living. It is a means to show that the contract has been acknowledged by taking possession of the asset.
It can only be used to transfer registered real estate. At least two people must see the act. The number of observers needed to prove a case varies by state.
- Registration documentation for the deed
This includes the deed, evidence of identity (such as a PAN card or Aadhaar card), the real estate deed, and other agreement-related documents.
- Charges of Involvement
The registration of the deed necessitates the payment of stamp duty and a processing fee. Stamp duties vary from state to state. The identical stamp duty rates apply to gifts of real estate investment as to sales of conveyancing documents.
In Delhi, there is a 4% male stamp duty and a 6% female stamp duty for the transfer of real estate via sale deed. When purchasing land in West Bengal’s panchayat regions and municipal areas, the council tax for male inhabitants is five percent and six percent, respectively.
However, for non-family individuals in Karnataka, a fee varying from Rs 1,000 to Rs 5,000 must be paid in addition to 5.6% of the total real estate value. The government of Uttar Pradesh has abolished the stamp duty for family property transfers.
These acquisitions were previously subject to a seven percent stamp tax. A few states will waive the registration fee if the asset is handed away as a gift.
Is It Necessary To Pay Stamp Duty When Transferring Real Estate To A Trust Or A Non-Profit Organisation?
If you’re donating the property to a non-profit organization, you don’t have to pay stamp duty. Check with your institution’s registrar department if you have any questions concerning the regulations. Additionally, several jurisdictions prohibit non-profit organizations from taking real estate as a charitable donation.
Is It Possible To Revoke the Deed?
Section 126 of the Transfer of real estate Act permits the cancellation of a deed provided the following conditions are met:
- Due to various reasons, both the giver and the recipient have agreed to terminate the deed.
- Because the receiver declined to accept the item, the change of ownership was entirely discretionary on behalf of the transferor.
- The Gift’s property conditions are illegal, unpleasant, and morally wrong.
- Fraudulent or criminal behavior might lead to the return of a gift.
- Revocation of a deed is impossible without including a clause stating that the gift is being revoked. For this reason, a ‘dismissal clause’ is required to prevent further complications.
The Different Types of Property Transfers
If you are a person who is alive, you can transfer your real estate to another active person, or you can share it with yourself and other living people. Ownership might be transferred immediately or at a later date. There are several options available when it comes to moving a real estate:
- Deed of Sale
- Deed of Gift
What Is the Difference Between a Gift and a Selling Deed?
Your property is sold in exchange for money in a selling deed. The deed states the amount of money you received for selling your real estate. On the other hand, Gifting is a complete surrender of your property without compensation.
The administration does not allow the exchange of gifts between non-family members; instead, it collects stamp duty on the sale of real estate.
A Few Important Aspects to Remember
- Gifts for non-family members: Gifts between non-family members are not recognized as legitimate under Indian law. To make this assumption, one must assume that the proprietor would charge a fee from a stranger. The deed must be recorded as a selling deed in any case.
- Donors who wish to revoke a gift must show that they were tricked or coerced into making the gift. To reclaim an estate, there is no other option.
- Gifts received due to a legacy or inheritance are not taxable when accepted due to marriage.
- As long as the transferor has absolute ownership of the real estatein question, a deed can be considered lawful. No court orders should hinder the transfer of real estate under the terms of the deed.
- Present deeds are not taxed for those who obtained them as a wedding gift, an inheritance, or a gift from a local municipality. For example, it’s the same if you’ve got money or other donations from a foundation, a trust, or a medical institution.
Tips for Completing a Deed
- Completing a deed is unnecessary when giving a mobile property as a gift.
- Make it clear in the grant that you’re transferring the gift to the recipient because you care deeply about her.
- In an ideal world, the deed would also include a statement on why the gift is being given. It might be for the benefit of society as a whole or an individual.
- When registering the deed, you must confirm that the donee has accepted the gift.
- Before completing a deed, talk to your loved ones. If you don’t have them on board, you’ll be in trouble in the future.
The process is quite simple, but if you feel any difficulty, you can try out Vakilsearch. They are here to make it easy for people and businesses to access their professional and legal needs with a single click. They can help you with all the documentation and the legalities.