• Dec
  • 29
  • 2012

FAQ / Performa of gift deed, List of Relatives from whom Gift can be received without any tax liability

In Continuance of my article on  Taxability of gits from relatives and others , I have prepared  FAQ on Gift, ,list of relatives from whom an individual can receive the gifts without any income tax liability and also giving below Performa of gift deed.

1.Frequently Asked Question on Gift deed

What is a gift deed?

A gift deed is an agreement used when a person wishes to gift his asset (property or money) to someone. It is the transfer of certain existing (not future) moveable or immoveable property made voluntarily and without any consideration from one person (called ‘donor’) to another (called ‘donee’).

Who can gift property?

Any valid owner of an existing property can gift property. A minor is incompetent to gift a property though a guardian can accept such a gift on his behalf.

WHAT is the law that governs gifts by one person to another?

Transfer of Property Act, 1882.

What is a Transfer of Property?

Transfer of Property is an act by which a living person conveys property in present or in future to one or more living persons.

What may be transferred?

Property of any kind may be transferred, movable or immovable.

Can there be an oral transfer?

A transfer of property may be made without writing, if it is not expressly required by law. Gifts under the Islamic law may be made orally, as it does not require registration.

What is a gift?

It is a transfer of existing movable or immovable property made voluntarily without consideration by one person to another.

What are the ingredients of gift?

Gift is made by one person called the donor to another called the donee. There should not be any consideration for making a gift. That is, the donor should not receive consideration of any kind while making a gift. The donee should accept the gift in the lifetime of donor.

How gift of an immovable property is made?

Under the Indian Registration Act, any transfer of any immovable property, if the value of the property is more than Rs 100, should be in writing and should be registered.

What are the formalities for registering a gift deed?

The donor on requisite stamp paper should sign the deed. It should be attested by at least two witnesses; the donee should accept the gift.

What is meant by attested?

Attestation of an instrument (document) means that witnesses who sign the instrument should have seen the donor signing the gift deed and they should sign as witnesses in the presence of the donor and in the presence of each other.

Does gift of movable property require registration?

Gift of movable property, may or may not be registered. But delivery of the property and acceptance of it are essential.

How to effect delivery of the property?

The same way as goods is delivered in sale of goods.

What is the effect of a gift comprising both existing and future property?

A gift comprising both existing and future property is void.

Can gift be made to several persons and if one does not accept it, what happens?

A gift to two or more persons (donees) and one of them does not accept it, it is void so far he is concerned.

Can gift once made be suspended or revoked?

The donor and donee may agree that on the happening of a specified event, which does not depend upon the will of the donor, a gift shall be suspended or revoked.

What is a gift deed?

A gift deed is an agreement used when a person wishes to gift his asset (property or money) to someone. It is the transfer of certain existing (not future) moveable or immoveable property made voluntarily and without any consideration from one person (called ‘donor’) to another (called ‘donee’).

Who can gift property?

Any valid owner of an existing property can gift property. A minor is incompetent to gift a property though a guardian can accept such a gift on his behalf.

Why should I require a gift deed ?

As per law, the title in a property cannot be delivered without a written instrument even when its value is small. Therefore, such deed is important to obtain and execute.

What is the procedure to use such a deed?

The draft of such a deed can be directly printed as per instruction kit provided and can be successfully executed by obtaining the signatures of the donor, donee and witnesses. The registration of a gift deed involves additional formalities that have to be taken care of (see below).

What are the essential elements of a Gift Deed?

As per section 22 of Transfer of Property Act, a gift deed has the following essential elements:

  • Transfer of Property
  • No consideration (as it is just a gift)
  • Acceptance by the done

Is acceptance by the donee mandatory?

Yes, the acceptance of the gift is mandatory..

What happens if a person dies after making a gift deed without it being formally accepted by the donee?

As per recent directives by the court, acceptance of a gift is mandated without which such a deed is deemed void. Such acceptance must be made during the lifetime of the donor while he is ‘capable’ of making it.

Is registration of a gift deed mandatory?

As per section 123 of the Transfer of Property Act, the transfer of a gift of immoveable property must be effected by a registered instrument signed by donor and attested by two witnesses. For moveable property such as a car, such a registration is not mandatory and transfer can be achieved by delivery

2. If the individual person receives Gift from following persons are exempt from tax

Father

Mother
Brother

Sister
Son

Daughter
Grand Son

Grand Daughter
Husband

Wife
Sister’s Husband

Brother’s Wife
Wife’s Brother

Wife’s Sister
Husband’s Brother

Husband’s Sister
Mother’s Brother

Mother’s Sister
Mother’s Sister Husband

Wife’s brother’s wife
Father’s Brother

Father’s Brother’s Wife
Father’s Sister’s Husband

Father’s Sister
Grand Father

Grand Mother
Great Grand Father

Great Grand Mother
Daughter’s Husband

Son’s Wife
Wife’s Father

Wife’s Mother
Husband’s Father

Husband’s Mother
Wife’s Grand Father

Husband’s Grand Mother
Husband’s Grand Father

Wife’s Grand Mother
Wife’s Great Grand Father

Husband’s Great Grand Mother
Husband’s Great Grand Father

Wife’s Great Grand Mother

Brother’s Wife

Mother’s Brother’s Wife

Husband’s Brother’s Wife

3. Deed of Gift(Draft Copy )

1. Date:

2. Place:

3. Parties:

3.1 _____________________, son of ________________, by faith Hindu, by Nationality Indian, by occupation – __________, residing at ____________________.

(Donor, includes successors-in-interest and assigns)

- AND –

3.2 _____________________, son of ________________, by faith Hindu, by Nationality Indian, by occupation – __________, residing at ____________________.

(Donee, includes successors-in-interest and assigns)

[Donor, Donee collectively Parties and individually Party.]

NOW THIS DEED OF GIFT WITNESSES AS FOLLOWS:

4. Subject Matter of Gift:

4.1 Subject Land: ALL THAT piece or parcel of land hereditaments and premises measuring 1 one Cottah 8 eight Chhittacks be the same a little more or less out of the total land of 3 three Cottahs situate and lying at and being Municipal Holding No. _________, Ward No. _____, within the limit of ________ Municipality and having Postal Address _____________ and more fully and particularly described in the Schedule below and demarcated in colour Red on the Plan attached hereto (Subject Land).

4.2 The Structure: One-storied brick built dwelling house, having built up area of ____________ Square feet, be the same a little more or less, standing on the Subject Land (The Structure), described in the Schedule below.

4.3 Other Rights: Easements and all other rights, liberties, privileges and benefits appurtenant to the Subject Land and The Structure and all equipments, installations, fittings, fixtures etc. in or about The Structure.

4.4 Subject Property: The subject matter of the Gift is 4.1, 4.2 and 4.3 above, which are collectively described in the Schedule below and demarcated in colour Red and shown as “Lot – A” on the Plan attached hereto (collectively Subject Property).

5. Background:

5.1 Description of the Title: Chain of title is to be described in detail here.

5.2 Sale to Donor: By a Deed of Sale dated _______, registered in the Office of the Sub-Registrar, ________, in Book No. I, Volume No. ____, Pages __ to ___, Being No. ______ for the year __________ (Said Deed), said _______ (Name of the previous owner) sold the aforesaid plot of land measuring about 5 Decimals or 3 three Cottahs more or less comprised in Dag No. ______ as aforesaid to the Donor hereto.

5.3 Ownership of the Donor: In the circumstances, the Donor hereto became the sole and absolute owner of ALL THAT piece or parcel of land measuring 3 (three) Cottahs be the same a little more or less including the common passage situate and lying at ____________________ and comprised in _____________.

5.4 Construction by the Donor: Subsequently, the Donor constructed a one-storied brick built dwelling house on his acquired property as aforesaid in accordance with the building plan duly sanctioned by the appropriate authority.

5.5 Said Property: Thus the Donor has become the sole and absolute owner in respect of the land and the structure as referred above (Said Property). The Subject Property is the part and portion of the Said Property.

6. Representations and Warranties of the Donor:

6.1 Absolute Ownership: The Donor is the absolute owner of the Subject Property.

6.2 Right, Power and Authority to Sell: The Donor has good right, full power, absolute authority and indefeasible title to gift and/or alienate the Subject Property.

6.3 Free from Encumbrances: The Subject Property is free from all claims, demands, encumbrances, mortgages, charges, liens, attachments, lis pendens, uses, debutters, trusts, prohibitions, Income Tax Attachment, Financial Institution Charges and liabilities whatsoever or howsoever made or suffered by the Donor or any person claiming through the Donor and the title of the Donor to the Subject Property is free, clear and marketable.

6.4 No Prejudicial Act by the Donor: The Donor has not at any time done or executed or knowingly suffered or been party or privy to any act, deed, matter or thing whereby the Subject Property or any part thereof can or may be impeached, encumbered or affected in title.

6.5 No Personal Guarantee: The Subject Property is not affected by or subject to any personal guarantee for securing any financial accommodation.

6.6 No Bar by Court Order: There is no order of Court or any other statutory authority prohibiting the Donor from transferring and/or alienating the Subject Property or any part thereof.

7. Basic Understanding: The Donee is the son of the Donor and the Donor bears natural love and affection for the Donee. The Donor has expressed his desire of gifting the Subject Property in favour of the Donee and the Donee has agreed to accept such gift.

8. Gift:

8.1 Hereby Made: The Donor doth hereby gift to the Donee, absolutely and forever, free from all encumbrances of any and every nature whatsoever, the Subject Property, described in the Schedule below, being:

8.1.1 Subject Land: ALL THAT piece or parcel of land hereditaments and premises measuring 1 one Cottah 8 eight Chhittacks be the same a little more or less, out of the total land of the Donor, i.e. 3 three Cottahs situate and lying at and being Municipal Holding No. __________, Ward No. __, within the limit of _________ Municipality and having Postal Address __________ and more fully and particularly described in the Schedule below and demarcated in colour Red on the Plan attached hereto.

8.1.2 The Structure: One-storied brick built dwelling house, having built up area of _________ Square feet, be the same a little more or less, standing on the Subject Land.

8.1.3 Other Rights: Easements and all other rights, liberties, privileges and benefits appurtenant to the Subject Land and The Structure and all equipments, installations, fittings, fixtures etc. in or about The Structure.

8.2 Consideration: Natural love and affection that the Donor bears for the Donee.

9. Terms of Gift:

9.1 Salient Terms: The gift of the Subject Property being effected by this Deed is:

9.1.1 Gift: A gift within the meaning of the Transfer of Property Act, 1882.

9.1.2 Absolute: Absolute, irreversible and forever.

9.1.3 Free from Encumbrances: Free from all encumbrances of any and every nature whatsoever including but not limited to lis pendens, attachments, liens, charges, mortgages, trusts, debutters, reversionary rights, residuary rights, claims and statutory prohibitions.

9.1.4 Other Rights: Together with Easements and all other rights, liberties, privileges and benefits appurtenant to the Subject Property.

10. Miscellaneous:

10.1 Delivery of Possession: Simultaneously with the execution of these presents khas, vacant and peaceful possession of the Subject Property is handed over by the Donor to the Donee (Possession Date).

10.2 Outgoings: All Municipal and other taxes, penalties, surcharge, outgoings, liabilities and levies on or relating to the Subject Property till the Possession Date, whether as yet demanded or not, shall be borne, paid and discharged by the Donor and thereafter that shall be borne, paid and discharged by the Donee.

10.3 Holding Possession: The Donor hereby covenant that the Donee shall and may, from time to time and at all times hereafter, peacefully and quietly enter into, hold, possess, use and enjoy the Subject Property and every part thereof and receive rents, issues and profits thereof and all other benefits, rights and properties hereby gifted or expressed or intended so to be unto and to the Donee, without any lawful eviction, hindrance, interruption, disturbance, claim or demand whatsoever from or by the Donor or any persons lawfully or equitably claiming any right or estate therein from under or in trust from the Donor.

10.4 Further Acts: The Donor hereby covenants that the Donor or any person claiming under him, shall and will from time to time and at all times hereafter, upon every request and at the cost of the Donee and/or successors-in-interest of the Donee, do and execute or cause to be done and executed all such acts, deeds and things for further or more perfectly assuring the title of the Donee to the Subject Property.

10.5 Production of Said Deed: As referred hereinbefore, the Said Deed and all other title documents in respect of the Said Property shall be lying with the custody of the Donor and unless prevented by fire or other unavoidable accidents from time to time and at all times hereinafter at like request and cost of the Donee, the Donor or his successors-in-interest will produce or cause to be produced the Said Deed and/or the said documents for reasonable requirement as may be required from time to time.

10.6 Assessment of Value for the purpose of Advalorem Stamp Duty: For the computation of stamp duty, the value of the Subject Property is assessed at Rs. ______/- (Rupees ________) only.

11. Interpretation:

11.1 Number: Words denoting the singular number include, where the context permits and requires, the plural number and vice-versa.

11.2 Headings: The headings in this Deed are inserted for convenience only and shall be ignored in construing the provisions of this Deed.

11.3 Definitions: Words and phrases have been defined in the Deed by bold print and by putting them within brackets. Where a word or phrase is defined, other parts of speech or grammatical forms of that word or phrase shall have corresponding meaning.

Schedule above referred to

(Subject Property)

[Subject Matter of Gift]

Detail of the Subject Property with boundary description …………

The Plot is shown on the Plan annexed hereto with the border Red and the Plan is treated as a part of this Deed.

12. Execution and Delivery:

12.1 In Witness Whereof the Donor has executed and delivered this Deed of Gift on the day, month and year mentioned above.

(DONOR)
I accept the Gift mentioned hereto with pleasure:
(DONEE)
 Witnesses:

 Signature: _________________________

Name:

Father’s/Husband’s

Name:

Address:

 

Signature: ________________________

Name:

Father’s/Husband’s

Name:

Address

———————–

Author

T.Xavier M.Com,PGIT, (ICWAI- Final)

Email – xavierindia@yahoo.co.in


24 Responses to “FAQ / Performa of gift deed, List of Relatives from whom Gift can be received without any tax liability”

  1. Jose says:

    I have a joint account with my wife and I have deposited a good portion of my retirement benefits in that account. If I put the amounts as FD’s with her name as first, can the interest be treated as her income and pay the taxes accordingly. Can I say that it is her share of my property and treat it as hers in order to avoid clubbing the income with mine? Is there any documentation needed

  2. Ajit Nanda says:

    Thanks a lot

  3. mohan says:

    sir,
    we (my self ,my elder brother and my elder sister )are three chidren to our parents ,our parents made one self acquired property one house and the same was divided to us (myself,my brother and my sister) through will,we are all in good terms and healthy relation,now my brother and sister want to gift the property to me which they have got through will made by my parents ,please advise how to take the gift through which way ?

  4. Rajesh Ajmani says:

    My mother wants to gift property in my wife’s name. Will it attract Gift Tax?

  5. Pravin Goswami says:

    Sir,

    We are domiciled & Staying Me Mother Father 2 Brothers in Mumbai, Maharashtra for last 30+ Yrs.

    my Mother had bought a Agricultural Land about 34 Decimals in our Village in Bihar in 1986 vide a Sale Deed with Land Value Rs.10000/-

    My Mother Intends to Gift this Land to me vide Gift deed.
    we are using your Gift Deed Proforma.

    I Need to understand
    1)which address as place of Stay of DONOR/ DONEE do i need to mention in the Gift Deed. (Mumbai, Maharashtra or Gaya,Bihar)
    2)Can i register this Gift Deed here in Mumbai.. mother is old & not in prime of health.
    3)Gift Deed Max. Stamp Duty Registration as mentioned is Rs.1000 + Rs.500
    would the amount be the same.
    4)Gift deed …does it need a Stamp Paper & Stamp Paper & Stamp paper Amount Rs. 100 / Rs. 500 .

    Awaiting your Kind Response.

    Best Regards

    Pravin Goswami

  6. yogananda says:

    sir as the property ie constructed house as it is in jointly registered by me and my brother but now we want to give a gift to my sister please give the detail’s what are the documents required for registration and what is the stamp value to pay to the govt as property is in bangalore north near peenaya
    thanks alot

  7. Lucien says:

    No response, only another question: Can the interest in real property be gifted even though the property has not yet been probated?

  8. Ankita Sahu says:

    can a gift made by a mother to her daughter of movable property like hospital instruments ( assets ) can i get a similar gift draft for my convinience…

  9. Nidhi says:

    Can i gift property of my elder sister or brother . (Brother is 2 yrs elder than me ).

  10. reddy says:

    I received 30 lakhs from my mother by cheque as gift. do i need to make a gift deed. please email me format if gift deed is compulsory

  11. mukul says:

    I need to take gift of Rs.25000/- from my mother by Cheque, kindly let me know:
    – Whether it should be made on stamp paper or plain paper?
    – Value of the Stamp Paper on which the deed to be made?
    – The Stamp paper should be purchased in the name of me, or my mother?
    – Whether the registration/notray is mandateory?
    thanks & regards

  12. suresh b says:

    I have received an amount of Rs 34 lakhs from my brother as GIFT by way of a cheque which I have deposited into my account with another bank. But no Gift deed has been done till date. Pl provide a draft gift deed and let me know ab out
    whether it is taxable ?

  13. shri says:

    If my wife gives a gift deed to me, can i give it back to her as a gift deed again?

  14. Brig Ranbir Sethi (Retd) says:

    I require a format for the transfer of monetary gift from brother to sister. Kindly furnish it at the earliest. Thank you.

  15. S Nagar says:

    I had gifted money to my mother via cheque. Please provide the format for the affadavit I need to have for this Gift.

  16. Tarun says:

    My wife received a gift from her father(who is living) of a flat.This is still in her father’s name.If she transfers it in her name,does she have to pay stamp duty of 5%(as is prevalent in Delhi)

  17. Ashutosh says:

    As transfer of cash does not required any registered gift deed.. So can I receive gift of any amount from my brother and mother?

    Do i just need to get these done in writing on plain paper. Please advise.

    what if amount is already with me.. do I need to transfer the amount first and than again ask them to credit in my account. please help…

  18. Rahul says:

    Karta of an HUF Cannot make any gift of HUF property to anyone.

  19. malagett says:

    Unexplained sources

  20. chirag says:

    Respected members
    my question is HUF transfer as loan to karta 300gms by valuing gold at fair market price @ karta is paying lumsum interest @12% or royalty at fair market price
    now karta has used gold bar for his propreitory concern & sold jewellery. on demand of huf he ready to give back either cash(equivanant to gold rate ) or pure gold
    pls help me tax is applicable Long term short term conversion Capital assets to Stock in trade or Gift tax(indirectly as partition criteria)

  21. ca. Mehta says:

    Lovely. Thank you CA Hemant

  22. V Chirag says:

    Hi

    Can a karta of an HUF gift the HUF property i.e cash to anyone of this relative(grandson) out of all the members of the HUF property like sons, grandsons etc.??

    Regards,
    Chirag.

  23. Anil says:

    Gift to daughter in law will be tax free, but income from the gifted property will be clubbed in the income of donor.

  24. B.C.Rokadiya says:

    can gift -moveable/non-moveable, be made to grand daughter(daughter of daughter), daughter-in-law(wife of son) and will it be tax free in the hands of donee and donor?

    should appreciate your elaboration to understand implications.

    B.C.Rokadiya
    30.12.12

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