A gift deed is typically used to legally transfer the property (movable or immovable) and it is executed between the donor and donee. Though gift deed replicates the sale agreement to a greater extent, it cannot be executed in the presence of any consideration whatsoever. As the name suggests, the gift deed is strictly based on the volunteer transfer of the property and it doesn’t lure any monetary arrangement. To execute a gift deed, there are certain things that an individual need to follow before legally transferring the asset/property to their beloved ones. In this article, you will learn what the gift deed is and how it works in the real world.
What is the Gift deed?
Transferring property in India is a matter of legal affairs. In these matters, anyone who intends to transfer the ownership of the property to another person needs to execute a legal contract that encloses comprehensive detail of the property, applicable clause, and involved parties. Under section 122 of the Transfer of Property Act, 1882, the gift deed can be executed by the donor for transferring the immovable property in the favor of the recipient.
gift deed is more or less identical to the sale deed but it free from sale consideration. As per section 17 of the Registration Act 1908, anyone who wishes to voluntarily transfer the property to the done must register gift deed with the sub-registrar, or else the transfer will be invalid. As soon as the gift deed is executed by the registrar, it cannot be revoked by the involved parties.
Read our article:Procedure for Gift deed registration: A Step By Step Guide
The Gift Deed Encloses the Following Clauses
A typical gift deed is incorporated with the given clauses. Those are as follows:-
It shall be executed in the absence of any consideration whatsoever or else it would be deemed as a sale.
Possession of Property
The donor must be the absolute owner of the property. Without legal ownership of a property, the gift deed cannot be executed.
The presence of coercion or fear shall void the agreement.
Detailed info about the property
The gift deed must enclose brief info about the property available to the concerned parties of the transaction.
About Donor and donee
Gift deed must manifest the relation between the donee and donor as it allows the parties to avail of a concession on stamp duty, particularly in the case of blood relationships.
Rights and Liabilities
Gift deed must incorporate with the rights of the donor and donee.
The delivery clause typically included the info about the mode, method, and delivery date of the property.
Modification of the gift deed is certainly impossible especially if it doesn’t enclose any revocation clause. Though it is not mandatory, such a clause can help overcome future complications.
List of Documents required
- An original as well as the duplicate copy of the certificate is compulsory for the registration.
- 2 passport size photographs of witnesses, donor, and the donee.
- Photo identification proof for all the involved parties such as voter’s ID and passport.
- Copies of incorporation certificate if the donor and the donee are not an individual
- Proof of the land register card to show that the property is not acquired by the government.
- Copy of municipal tax bill to indicate the construction or built date of the land.
- PAN card of the involved parties.
- Signatures and passport size photos of all the parties
Particulars Included in the Gift Deed Executed for Immovable Property
- Donor’s declaration regarding the transfer of the ownership of the property.
- Name and address of the witnesses along with their signatures.
- Description of the property including the address where it exists
- Estimate the value of the property
- Name and address of the donee along with their signatures.
- Name and signature of the donor.
Particulars Included in the Gift Deed Executed for Movable Property
- Donor’s declaration regarding the transfer of the ownership of the movable property.
- Name and address of the donor along with their signatures.
- Description of the movable property
- Bank detail plus address if gifting is done via cheque
- Income tax number, if applicable.
- Owner’s declaration regarding the revocation, if applicable.
- Name and address of the recipients along with their signatures.
- It cannot be canceled once it is registered in the office of sub-registrar.
- Anybody can go through the record of the transfer of property available at the concerned Sub-Registrar office. The inspection would allow the individual to get ascertain the legal status of the property for which the concerned parties want to execute the gift deed.
- If the person wants to buy to property, they can inspect the available record for the same in the sub-registrar office to verify the legal status.
- The immovable property does not attract sales tax. But an applicant needs to pay the registration fee and stamp duty as per the provisions given in the Indian Registration Act 1908 and the Indian Stamp Act 1899 respectively.
- The movable property attracts both states as well as central sales tax as per the provision mention under the General Sales Tax Act and the Central Sales Tax Act, 1956.
Among all other methods of registering the property’s transfer,It’s certainly the most profitable option. Since it’s mostly utilized for the voluntary transfer of the immovable property, it neither attracts state sales tax nor the central sales tax. CorpBiz’s professional can help you obtain such a registration in no times through deliberative and holistic approach. CorpBiz is a renowned name in the field in the licensing, governmental registration, and several other financial services.
Read our article:List of Advantages of Gift Deed Registration That You Must Know