Gift Deed is a legal document used to voluntarily transfer ownership of immovable property (such as land, houses, apartments, etc.) from one person (the donor) to another (the donee) without any exchange of money or consideration. Gift deeds are commonly used to transfer property among family members, but they can be made between any two individuals. Here are key details about gift deeds for immovable property.

1. Essential Elements of a Gift Deed:

• Donor: The person who is gifting the property.

• Donee: The person who is receiving the gifted property.

• Voluntary Transfer: The transfer must be voluntary, without any coercion, fraud, or undue influence.

• No Consideration: The transfer must be made without any monetary exchange or consideration.

• Property Description: The property being transferred must be clearly described, including its address, size, boundaries, etc.

• Acceptance by Donee: The donee must accept the gift while the donor is still alive. The acceptance should be made during the donor’s lifetime.

2. Requirements for a Valid Gift Deed:

• Written Document: The gift deed must be in writing. Oral gifts of immovable property are not legally valid.

• Registration: Under the Registration Act of 1908 (India), the gift deed must be registered with the local sub-registrar's office where the property is located. Unregistered gift deeds are not enforceable in court.

• Stamp Duty: Stamp duty must be paid for the registration of the gift deed. The rate of stamp duty may vary from state to state (in India) or region to region. In some cases, concessions are given when the gift is made to family members.

• Witnesses: The gift deed must be signed by the donor and donee, and it should also be attested by at least two witnesses.

3. Tax Implications:

• Donee's Tax Liability: If the gift is received from a relative (as defined by law), it is not taxable under Indian tax laws. However, if the gift is from a non-relative and the value exceeds ₹50,000, the entire value is taxable as "Income from Other Sources" for the donee.

• Capital Gains Tax: The donor does not pay capital gains tax on gifting the property, but if the donee sells the property in the future, they may be liable for capital gains tax based on the original cost of acquisition by the donor.

4. Revocation of Gift Deed:

• A gift deed, once executed and accepted, is usually irrevocable.

• Revocation is only possible under specific conditions such as mutual agreement between the donor and donee or if a condition allowing revocation is included in the original gift deed.

5. Benefits of a Gift Deed:

• Clear Legal Transfer: Since a gift deed is registered, it ensures that the transfer of property is legally sound.

• Tax Efficiency: Gifting property to relatives can help avoid certain taxes compared to selling the property.

• Immediate Effect: The ownership transfer is immediate and not subject to future events or conditions.

6. Disadvantages and Considerations:

• Stamp Duty and Registration Charges: These costs can sometimes be high, depending on the state or region.

• Irrevocability: Once the gift is made, the donor cannot revoke it, unless a revocation clause is included.

• Future Tax Liabilities: The donee may face capital gains tax if the property is sold at a later date.

7. Procedure for Executing a Gift Deed:

• Draft the gift deed with details about the property, donor, and donee.

• Visit the sub-registrar’s office with the required documents (ID proof, property documents, etc.).

• Pay the necessary stamp duty and registration fee.

• The gift deed must be signed by the donor, donee, and witnesses in the presence of the sub-registrar.

• After registration, the donee becomes the legal owner of the property.

8. Documents Required for Gift Deed Registration:

• Proof of ownership of the property (title deed).

• Identity proof of the donor and donee (Aadhaar card, PAN card, etc.).

• Proof of payment of stamp duty.

• Encumbrance certificate (if applicable).

• Property card and other documents related to the property.

Gift Deed vs. Will:

• A gift deed transfers property ownership immediately, while a will takes effect only after the testator's death.

• A gift deed is generally irrevocable, but a will can be altered or revoked during the lifetime of the testator.