Home Agreements How to Draft a Gift Deed?

How to Draft a Gift Deed?

December 1, 2016

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WHAT IS GIFT DEED?

The lawful owner of a property can transfer it to another party without any lawful consideration through a gift deed. All such deeds must be signed by the donor, attested by at least 2 witnesses and registered. Once the gift deed is properly executed and registered, it vested all the legal rights and ownership to the done i.e., the person to whom the gift has been made and he or she becomes the absolute owner of the property thereafter. Generally, such gifts are given by one family member to another and are exempted from tax.

ADVANTAGE

1. A Gift Deed is one of the easiest ways to transfer property within the family members. There is no tax implications involved in it.

2. It is executed during the life time of the donor and transfer of property happens immediately.

3. By specifying the name on the deed, you can specify who you can leave your property to.

4. It allows you to protect your property in case of any dispute arise between the parties.

DOCUMENTS REQUIRED

Fill the Information Form
Provide required Documents.

FAQ

1. What is a Gift Deed?

A Gift Deed is a legal document describing voluntary transfer of the property from the donor (owner of the property) to the donee (receiver of the gift) without any exchange of consideration. The donor must be solvent and must not use this tool for tax evasion and for illegal gains.

2. What can be gifted?

• It must be well defined existing movable or immovable property. • It must be transferable. • It must be existing today and not be a future property. • It must be tangible.

3. When to make a Gift Deed?

A Gift Deed can be made I the following circumstances: • At the time of transferring the rights of the property in the form of a gift. • When there is no exchange of money involved. • To provide a legal representation to the gift transferred.

4. What should be included in the Gift Deed?

• Relationship details of the donor with the donee. • Rights and authority of the donor. • Description of the property being gifted. • Confirmation clause on the delivery of possession.

5. How to register a Gift Deed?

Registration of a Gift Deed is done as per the provisions of the Registration Act, 1908. Common steps involved in registration process are: • Valuation of property being gifted by an approved valuation expert. • Payment of Stamp duty and transfer duty. It varies from state to state and for current rates one should visit the official website of the respective State Governments.

6. What are the pros and cons of a Gift Deed?

I. Pros: • It is executed during the life time of the donor and the transfer happens immediately. • For a Gift Deed to be effective, it has to be registered. Registration renders it less liable to litigation. • One can evade tax while transfer through Gift Deed.

II. Cons: • Gift deed is irrevocable post execution. • There occurs an extra cost in the form of Stamp Duty in case of Gift Deeds.

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