A gift is a voluntary transfer of property or assets from one person (the donor) to another (the donee) without any consideration or compensation. It is governed by the Transfer of Property Act, 1882, in India. The key elements of a gift are:
- Donor: The person who gives the gift.
- Donee: The person who receives the gift.
- Property: The subject matter of the gift, which can be movable or immovable.
- Transfer: The transfer must be voluntary and without consideration.
- Acceptance: The donee must accept the gift during the lifetime of the donor and while the donor is still capable of giving.
Revocation or Suspension of Gift
A gift, once made, is generally irrevocable. However, there are certain circumstances under which a gift can be revoked or suspended:
- Revocation by Agreement: If there is an agreement between the donor and donee that the gift can be revoked upon the occurrence of a specified event, and such agreement is made before or at the time of the gift.
- Revocation for Fraud, Undue Influence, or Coercion: If the gift is obtained through fraud, undue influence, or coercion, the donor can revoke the gift.
- Incomplete Transfer: If the gift involves immovable property and is not registered, it can be revoked since the transfer is incomplete.
- Subsequent Failure of the Donee: If the donee fails to fulfill a condition subsequent to the gift, the gift can be revoked.
Deed of Gift – How Made
A deed of gift is a legal document that transfers ownership of property from the donor to the donee. It must include the following:
- Details of the Donor and Donee: Full names, addresses, and relationship between the parties.
- Description of the Property: Clear description of the property being gifted.
- Free Will of the Donor: Statement confirming the donor is transferring the property voluntarily without any consideration.
- Acceptance by the Donee: Statement confirming the donee’s acceptance of the gift.
- Signatures: The deed must be signed by both the donor and the donee.
- Witnesses: The deed must be attested by at least two witnesses.
Stamp Duty and Registration (India)
The registration and stamp duty requirements for a gift deed vary depending on whether the property is movable or immovable:
- Movable Property: Stamp duty on the gift deed for movable property varies by state, and registration is optional but advisable for legal proof.
- Immovable Property:
- Stamp Duty: The stamp duty on a gift deed for immovable property also varies by state. Generally, the stamp duty is a percentage of the market value of the property, often at a concessional rate if the gift is made to a family member.
- Registration: Under the Registration Act, 1908, a gift deed for immovable property must be registered. This involves:
- Preparing the gift deed on non-judicial stamp paper.
- Submitting the deed to the sub-registrar’s office within whose jurisdiction the property is situated.
- Paying the applicable registration fees.
- Both the donor and donee, along with witnesses, must be present for registration.
Key Points to Remember
- A gift deed must be executed and registered according to legal requirements to ensure it is legally enforceable.
- Stamp duty and registration fees must be paid as per state-specific laws.
- Gifts to family members often attract lower stamp duty rates.
- Legal advice should be sought to ensure compliance with all statutory requirements.
