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Online Gift Deed Registration

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What Is a Gift Deed?

A gift deed, as defined in Section 122 of the Transfer of Property Act, 1822, is a legally binding written document by which the donor can voluntarily transfer an existing movable or immovable property to the donee. A gift deed is only acceptable when it is given ‘without any consideration’ in return by a family member or friend to another. According to Section 17 of the Registration Act of 1908, if you want to transfer immovable property, you must have a registered gift deed.

Clauses in a Gift Deed Registration Online Format

Contributor and Donee Proof

The gift deed of property needs to specify the donor and donee's names, addresses, and relationships. Regarding consideration, the gift deed should specify that the donor is transferring the property to the donee out of ‘love and devotion’ and that no other kind of payment is being made to ease the transfer.

Voluntary Transfer

The gift deed of property should specify that the donor is freely and voluntarily transferring the donee ownership of the gift property. There must be no threats, pressure, or intimidation during the transfer.

Proprietor of Property

The gift property should be described in the deed as being actual, owned solely by the donor, and transferred to the gift recipient.

Property Specifications

A thorough description of the gift property should be included in the gift deed.

Rights of the Donee

The donation deed needs to include the donee's rights. It specifies the donee's rights to the property, including the freedom to sell, encumber, or lease it.

Acceptance by Donee

It should be included in the gift deed of property has been accepted by the donee.

Delivery

The intention to transfer ownership of the gift property must be stated explicitly or implicitly in the gift deed of property.

Witnesses

The donation paperwork should contain the names and addresses of the witnesses. It must be signed and witnessed by a minimum of two witnesses.

Revocation

The gift deed does not need to contain a revocation clause for the delivered property.

Gift Deed Clauses

Tax Implications of Gift Deed Registration

Gifts given after 1 April 2017, are taxable under Section 56(2)(x) of the Income Tax Act of 1961. Any person who receives a sum of money higher than ₹50,000 as a gift without obtaining any other benefits is liable to taxation in the donee's hands under the heading ‘Income from other sources’, as stated in Section 56(2)(x)(a).

When an immovable property is received as a gift and the stamp duty value of the gift deed of property exceeds ₹50,000, Section 56(2)(x)(b) states that the stamp duty value of the immovable property is taxable in the donee's hands. If the asset or money is received from any of the following people, however, the taxation on the gift is exempt and the donee will not be charged tax:

  • If a gift was given by relatives
  • If it is received in conjunction with the person's marriage, or
  • If it is obtained through a will, an inheritance, or
  • If it is accepted with the donor's death in mind, or
  • if it originates from a local authority as defined in the Section 10(20) of the Income Tax Act's explanation
  • If it originates from a fund or trust that is listed under Section 10(23C) of the ITR Filing Act, or if it is a university, foundation, or other institution of higher learning
  • If it originates from a trust or organisation that is permitted to conduct business by virtue of Section 12A or 12AA
  • If a person (donee) receives it from a trust that was set up or made just for the benefit of the person's relative.

Income Tax on Gift Deed

When it comes to gift deed registration, it is important to note that they must be declared in your Income Tax Returns (ITR). While the Gift Tax Act of 1958 was abolished in 1998, it was reintroduced in 2004. Itmeans that if you receive an immovable property as a gift deed, you may be required to pay taxes if its stamp duty value is more than ₹50,000 and if the property is received without adequate consideration. For instance, if the consideration is ₹1.5 lakhs but the stamp duty is ₹4 lakhs, the difference between the two values exceeds ₹50,000 and may be subject to taxation.

Advantages of Gift Deed Registration

The benefits of a gift deed are illustrated in the section that follows.

  • The gift deed registration process is simple, when both the beneficiary and the donor agree to transfer, a gift deed is completed
  • A registered gift deed is not subject to litigation
  • Gift deed property transfers are not subject to tax obligations.

What Type of Properties Can Be Gifted?

1. Property with Movable or Immovable Nature
2. Tangible Property
3. Property Eligible for Transfer
4. Existing Property

Documents Required for Registration of Gift Deed

A property donation deed must be registered with the help of the following papers:

  • Original donation deed with signatures
  • Identification documents for the donor and donee, such as copies of passports and licenses
  • Sale deed or other records demonstrating the donor's ownership of the property
  • Additional court orders or documents proving the worth of the property

Eligibility for Gift Deed Registration

In order for a Gift deed to be valid the following conditions has to be met:

1. To create a valid gift deed, the donor must be mentally competent
2. The donor cannot be a minor under the law
3. The recipient of the gift can be a minor, but only with a natural guardian as a nominee
4. The guardian will manage the property until the recipient becomes an adult
5. The beneficiary must be alive for the gift deed to be valid
6. The property being gifted must be an existing movable or immovable property owned by the donor
7. No monetary exchange should be involved in the gift deed
8. It is not possible to transfer onerous property to a minor through a gift deed
9. Both the donor and the recipient must be willing parties and should not be persuaded into the gift transfer.

Gift Deed Format

Gift Deed Format

Who can be a Donor/Donee?

A donor is a person who gives something, such as money or property, to another person or organisation. A donee is the person who receives the gift. In India, anyone can be a donor as long as they are of sound mind and have the legal capacity to make a gift. There are no age restrictions on who can be a donor. However, there are some restrictions on who can be a donee. For example, minors cannot be donees of property.

Types of Donors

  • Individual donors: These are individuals who donate money or property to charities or other organisations.
  • Corporate donors: These are businesses that donate money or property to charities or other organisations.
  • Foundation donors: These are foundations that donate money or property to charities or other organisations.
  • Government donors: These are governments that donate money or property to charities or other organisations.

Types of Donees

  • Charities: These are organisations that are dedicated to helping others.
  • Non-profit organisations: These are organisations that are not for profit and are dedicated to a specific cause.
  • Government organisations: These are organisations that are run by the government and are dedicated to providing services to the public.
  • Individuals: These are individuals who receive gifts from donors.

When Making a Gift, It Is Important to Consider

  • The purpose of the gift: What is the purpose of the gift? Is it to help a charity, a non-profit organisation, or an individual?
  • The value of the gift: How much is the gift worth?
  • The tax implications of the gift: What are the tax implications of the gift?
  • The legal requirements for making a gift: What are the legal requirements for making a gift?

It is also important to consult with a lawyer to ensure that the gift is made properly and that the donor's wishes are respected. Vakilsearch experts will guide you through

Process of Transferring a Property via a Gift Deed

Property gift deed registration is a legal process and requires legal experts' support. The Process of property transfer in the form of a gift deed is explained below.

1. Drafting the Gift Deed: The donor and recipient must agree on the terms of the gift deed, including the details of the property being gifted, and the terms and conditions of the transfer. They must sign the gift deed in the presence of two witnesses who are not beneficiaries of the gift
2. Pay the Stamp Duty: The gift deed must be stamped with the appropriate stamp duty as per the state laws. The stamp duty varies from state to state and depends on the value of the property being gifted
3. Register the Gift Deed: The registered gift deed must be submitted to the Sub-Registrar with jurisdiction over the property. The Sub-Registrar will verify the identity of the parties and witnesses, and the property details, before registering the gift deed
4. Obtain the Registered Gift Deed: Once the gift deed is registered, the donor and recipient can obtain a copy of the registered gift deed from the Sub-Registrar's office

Gift Deed Registration Process

  • A gift deed is a legal document that transfers the ownership of property from one person to another. The gift deed registration process in India is relatively simple, and can be completed in a few easy steps
  • First, the donor and recipient must visit the office of the sub-registrar together
  • The donor will need to produce proof of identity, such as a passport or Aadhaar card, and the recipient will need to provide proof of residence
  • Next, the donor and recipient must fill out the relevant paperwork
  • The paperwork must be signed by both parties in front of two witnessesOnce the paperwork is complete, the fees for registration must be paid. The fees vary from state to state.Finally, the completed paperwork and payment receipt must be submitted to the sub-registrar’s office
  • Once registered, the gift deed becomes legally binding and cannot be reversed.

Gift Deed Registration Charges/Fees

  • There are several factors that contribute to the total gift deed registration charges or fees in India. These include the value of the property being gifted, the location of the property, and the applicable stamp duty rates. In addition, there may be other miscellaneous charges levied by the Registrar of Deeds.
  • The value of the property being gifted is one of the most important factors in determining the gift deed registration charges or fees. Generally, properties with a higher value will incur higher registration charges or fees. This is because properties with a higher value are subject to higher stamp duty rates.
  • The location of the property also plays a role in determining the registration of gift deed charges or fees. Properties located in urban areas typically incur higher registration charges or fees than those located in rural areas. This is because stamp duty rates are typically higher in urban areas.The applicable stamp duty rates also play a role in determining the gift deed registration charges or fees.
  • Stamp duty rates vary from state to state, and even within states. Therefore, it is important to consider the stamp duty rates that apply in the state where the property is located before gifting a property.In addition to the above-mentioned factors, there may be other miscellaneous charges levied by the Registrar of Deeds.
  • These charges can vary from state to state, and even from Registrar to Registrar. Therefore, it is important to inquire about all applicable charges before registering a gift deed.

Grounds for the Cancellation of a Gift Deed in India

Grounds for the cancellation of a gift deed in India are outlined in Section 126 of the Transfer of Property Registration Act, 1882. These are listed below:

  • If certain events stated in the gift deed take place or do not take place, without the donor's involvement or control. The registered deed needs to mention this ground. For the gift transaction to be legally binding, the terms of revocation or cancellation must not be objectionable to the property or unlawful unless they are expressly stated in a separate agreement
  • If the agreement's assent was attained through trickery, coercion, improper influence, or misreading the gift deed of property can be revoked.

Why Vakilsearch?

It is now easy to register a gift deed with Vakilsearch:

  • Vakilsearch will help you with the gift deed registration
  • We will provide you with the best experience
  • We are always ready to help you with client-centered, trustworthy, and ethical service standards.

Recent Updates on the Gift Deed

Revised Stamp Duty in Tamil Nadu After a 20-Year Gap

April 2023: Tamil Nadu has recently revised the stamp duty for over 20 legal transactions, marking the first adjustment in two decades. The revised charges now apply to adoption deeds, affidavits, agreement duplications, agreement cancellations, and memoranda of association for companies. However, the stamp duty for property registration has remained the same in Tamil Nadu.

The Indian Stamp (Tamil Nadu Amendment) Act 2023 was presented in the Assembly, announcing the increased stamp duty rates. Adoption deeds will now be subject to a stamp duty of ₹1000, up from ₹100. Affirmations or declarations will be charged ₹200, increased from ₹20, and the fee for duplicating an agreement is now set at ₹500, up from ₹20.

During the Assembly session, it was clarified that the increase was implemented to reduce expenses related to printing stamp papers of lower denominations.


No Stamp Duty Exemption for Multi-State Cooperative Societies in Tamil Nadu

March 2023: The Madras High Court issued a circular stating that the stamp duty exemption granted by the Tamil Nadu government does not apply to cooperative societies falling under the Multi-State Cooperative Societies Act 2002. Justice SM Subramaniam of the Madras High Court pointed out that the Multi-State Cooperative Societies Act is a central enactment, while the exemption provided is specific to societies governed by the Tamil Nadu Cooperative Societies Act, a state enactment.

The Madras High Court stated, 'Let us now consider the provisions of the Multi-State Cooperative Societies Act, 2002. Section 3 provides definitions; section 3(B) defines a 'multi-state cooperative society' as a society registered or deemed to be registered under this Act and includes a national cooperative society and a federal cooperative.

Therefore, a cooperative society registered under the Multi-State Cooperative Societies Act 2002 is a multi-state cooperative society within the provisions of the Act. Thus, the said multi-state cooperative societies cannot be construed as a cooperative society or deemed to be a cooperative society under the provisions of the Tamil Nadu Cooperative Societies Act, 1983.

FAQs on Online Gift Deed Registration

If a gift deed involves the transfer of property to a minor, it is necessary for the minor's legal guardian to accept the gift on their behalf. However, once the minor reaches the legal age, they have the option to either accept or reject the gift. The decision to accept or reject the gift ultimately lies with the minor, and they are not bound to keep the gifted property if they do not wish to do so. .
Once a gift deed has been transferred to the donee, they become the rightful owner of the property and are therefore responsible for all associated fees and charges. This includes payments for utilities like electricity, maintenance fees, municipal taxes, and any other relevant charges that may apply. It is important for the donee to be aware of these responsibilities before accepting the gift deed, as they will be solely responsible for any outstanding dues or charges that may arise.
Any person with a sound mind and competent enough to enter into an agreement can be a donor.
A gift deed has to be declared while filing the Income Tax Returns (ITR). The Gift Tax Act of 1958 was abolished in 1998, only to be reintroduced in 2004.
No. A minor is considered incapable of entering into an agreement.
Yes, it can be sold if there is no condition attached at the time of registration.
Both the donor and donee can challenge a registered gift deed. The legal heirs can take legal actions in case of the demise of both parties. It is challenged in court based on the legality issues.
A lawyer can help in drafting a gift deed by ensuring that it includes all the necessary details, such as the description of the gift, the donor and recipient's details, and any terms and conditions associated with the gift.
Yes, a gift deed is a legal document that formalises the transfer of ownership of a gift from the donor to the recipient. It is a valid and enforceable document that can be used as evidence in case of any disputes.
According to the law, you can only officially hand over property ownership with a written document, even if the property is worth little. So, it's vital to get and complete this paperwork.
According to section 123 of the Transfer of Property Act, when you want to give someone a piece of land or a building as a gift, you must make it official using a registered document. This document should have your signature and should be witnessed by two people. However, if you're giving away something movable, like a car, you don't have to do this formal registration; you can hand it over to the person you're giving it to.
A Gift Deed doesn't involve any money changing hands. If there's any exchange of something valuable or any form of consideration, it won't be considered a valid Gift Deed.
Indeed, property obtained through a Gift Deed can be sold as long as it was received through a registered Gift Deed without any attached conditions.
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