Stamp duty is a tax that is levied on the legal recognition of a document or instrument, such as a property deed, agreement, or contract. The amount of stamp duty varies from state to state in India and is usually a percentage of the transaction value or property value.
Now, Following are the stamp duty rates for the property in every state as per the data collected:
- Andhra Pradesh – 5%, Arunachal Pradesh – 6%, Assam – 7%
- Bihar – 7%, Chhattisgarh – 5%, Delhi – 6%, Goa – 5%
- Gujarat – 5%, Haryana – 7%, Himachal Pradesh – 6%
- Jharkhand – 7%, Karnataka – 5%, Kerala – 8%
- Madhya Pradesh – 8%, Maharashtra – 6%, Manipur – 7%
- Meghalaya – 6%, Mizoram – 7%, Nagaland – 7%
- Odisha – 5%, Punjab – 6%, Rajasthan – 5%
- Sikkim – 7%, Tamil Nadu – 7%, Telangana – 5%
- Tripura – 6%, Uttar Pradesh – 8%, Uttarakhand – 6%
- West Bengal – 6%
What Is A Gift Deed?
A gift deed in India is a legal document that is used to transfer ownership of a property or other asset from one person to another as a gift. The gift deed is governed by the provisions of the Indian Transfer of Property Act, 1882 and the Registration Act, 1908.
The gift deed contains details about the gift, including the name and address of the donor (the person making the gift) and the donee (the person receiving the gift), a description of the property or asset being gifted, the date of transfer, and any terms and conditions associated with the gift.
To make a gift deed, the donor must be the legal owner of the property or asset and must have the mental capacity to make a gift. The done must accept the gift voluntarily, and there should not be any consideration involved in the gift. In other words, the gift should be given without any expectation of receiving anything in return.
Once the gift deed is executed, it must be registered with the relevant authority, such as the Sub-Registrar of Assurances or the Registrar of Companies, depending on the type of property being gifted. The gift deed must also be stamped and payment of stamp duty is required as per the applicable laws of the state where the property is situated.
It is important to note that a gift deed is a permanent transfer of ownership, and once the gift is made, it cannot be revoked or cancelled. Therefore, it is essential to ensure that all the terms and conditions associated with the gift are clear and agreed upon by both parties before executing the gift deed.
What Are The Various Assets That Can Be Transferred As Deed?
A gift deed can be used to transfer ownership of various types of assets from one person to another. Here are some of the common types of assets that can be covered under a gift deed in India:
- Immovable property: This includes land, buildings, and any other structure that is permanently attached to the ground.
- Movable property: This includes assets that can be moved from one location to another, such as furniture, vehicles, and jewelry.
- Financial assets: This includes investments such as shares, bonds, and mutual funds.
- Intellectual property: This includes trademarks, patents, copyrights, and any other intellectual property rights.
- Cash: Money can also be gifted through a gift deed.
It is important to note that the rules and regulations governing the transfer of ownership of different types of assets can vary. For example, the transfer of immovable property requires registration with the appropriate authority, payment of stamp duty, and compliance with local laws. Similarly, the transfer of financial assets or intellectual property may require additional documentation and compliance with specific legal requirements.
Therefore, it is essential to consult a legal professional to ensure that all the necessary formalities and legal requirements are met when preparing and executing a gift deed for any type of asset.
How Is A Deed Drafted In India?
Drafting a deed in India involves the following steps:
- Identify The Parties Involved: The first step is to identify the parties involved in the transaction, such as the buyer, seller, and witnesses. You should also include their full names, addresses, and other relevant details.
- Define The Property: The deed should include a clear description of the property being transferred, including its address, size, and other relevant details.
- Specify The Consideration: The consideration is the amount paid for the property, and it should be clearly specified in the deed.
- Include Relevant Clauses: The deed should also include clauses related to possession, title, warranties, and other relevant terms and conditions.
- Obtain Necessary Approvals: You may need to obtain necessary approvals from government authorities, such as the registrar of properties, before the deed can be executed.
- Get The Deed Executed: The parties involved should sign the deed in the presence of witnesses and have it registered with the relevant authorities.
- Pay Stamp Duty And Registration Fees: Stamp duty and registration fees need to be paid to the government authorities before the deed can be registered.
- Obtain The Registered Deed: Once the deed is registered, you should obtain a copy of the registered document from the registrar of properties.
Note that the process of drafting a deed may vary depending on the nature of the transaction and the specific requirements of the relevant authorities. It is always recommended to consult a legal professional for assistance with drafting a deed.
Gift Deed Vs Will. Which One Is Better?
Both a gift deed and a will are legal instruments used for transferring assets from one person to another. However, there are some differences between the two that may make a gift deed a better option than a will in certain situations.
- Immediate Transfer of Ownership: When a gift deed is executed, ownership of the property is transferred immediately from the donor to the done. In contrast, a will only come into effect after the death of the testator. This means that if the donor wants to transfer ownership of the property during their lifetime, a gift deed is a better option.
- Avoidance of Probate: When a will is executed, it needs to go through the probate process, which can be time-consuming and expensive. Probate is a legal process where a court confirms the validity of the will and appoints an executor to distribute the assets according to the terms of the will. In contrast, a gift deed does not require probate, which means that the transfer of ownership is smoother and faster.
- Tax Implications: In India, both gift deeds and wills have tax implications. When a gift is made, it may be subject to gift tax if the value of the gift exceeds a certain threshold. However, if the transfer is made through a will, the beneficiaries may have to pay inheritance tax on the assets received. Depending on the value of the assets and the tax implications, a gift deed may be a more tax-efficient option.
In short, a gift deed may be a better option than a will in situations where the donor wants to transfer ownership of the property during their lifetime, wants to avoid the probate process, or wants to minimize the tax implications associated with the transfer. However, each situation is unique, and it is advisable to consult a legal professional to determine the most appropriate option for your specific circumstances.
In conclusion, a deed is a legal document that is used to transfer ownership or interest in a property or asset from one person to another. In India, deeds can be of various types such as gift deed, sale deed, lease deed, etc.
The process of registering a deed in India involves identifying the appropriate authority, obtaining the required documents, paying the stamp duty, drafting the deed, submitting the documents for registration, and obtaining the registered copy of the deed.
On the other hand, the process of drafting a deed in India involves identifying the type of deed, gathering information, drafting the deed, reviewing the deed, executing the deed, and registering the deed, if required.
It is important to ensure that all the necessary formalities and legal requirements are met when registering or drafting a deed in India. It is advisable to consult a legal professional to ensure that the process is followed correctly and the deed is legally binding.
It is also recommended to consult with a qualified lawyer/Advocate who has experience in drafting deed and registration; our teams of experts are ready to guide you.