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Gift Deed

Gift Deed - A gift deed is a legal instrument that lays down the terms and conditions of a voluntary transfer of property given as a gift from one person to another. A gift is given without any consideration and must be made by the free will of the donor i.e. the owner of the gifted property. The donor must also be a solvent person and the gift must be made out of love and not for any illegal or illicit gains.

Which Property Can Be Gifted?

The following kinds of property can be gifted by way of gift deed in India:

• An existing movable property.
• An existing immovable property.
• Cash
• Transferable property.
• Tangible Property.

Process of Gifting Through Gift Deed

The following process is followed to gift a property through a Gift Deed in India:

• Drafting of a Gift Deed: A gift deed is a written document and must be drafted by a good documentation lawyer. The gift deed must be properly drafted to include the details of the property, donor, donee, the act and free will of the donor, etc. The gift deed must clearly state that no consideration is received for the transfer of property.
• Registration of the Gift Deed: A gift deed for an immovable property cannot be held as valid unless it is registered. The gift deed must be registered in the presence of 2 witnesses in the Registrar’s office and by paying the registration charges and stamp duty. Registration of a gift deed is done under the Registration Act, 1908. The most important step in registering the gift deed is payment of stamp duty, which differs from state to state and even gender.
• Execution of the Gift Deed: Once the drafting and vetting of gift deed is done and the registration of the deed is completed, the gift deed is executed by the act of taking possession of the property.

Since minors are not allowed to enter into a contract, they cannot form a gift deed. However, when the minor is receiving property in gift, the natural or legal guardian of the minor can accept the gift on his/her behalf. The burden related to the gift cannot be enforced on the minor unless he/she attains the age of majority. Upon attaining the age of majority i.e. above 18 years of age, the minor can either accept the burden of the gift or return the gift to the donor.

A gift deed sounds like a simple affair but it must be drafted carefully with the help of a good property documentation lawyer who knows the slightest of details to be included in the legal document. It is to be noted that gift deed for the immovable property must be compulsorily registered with the office of Registrar of the district in which the property is situated.