Transferring wealth in the form of immovable property and or high value items as gifts is very common nowadays. However, many times transferor and transferee don’t document and or record such transfers. Many of them are under impression that as no consideration in money is involved, recording of those transactions is not required. As now there is interconnection between all the government authorities, this may result in unnecessary inquiry in future from various government authorities. Therefore it is important to formalize the transaction through a Gift Deed.
We will now discuss few important points related to Gift Deed:-
- What is meant by Gift Deed?
Gift Deed is a document by which a transaction is recorded. The donee (the recipient of the gift) does not have to pay any consideration to the doner for the gift as it involves a voluntary act of giving. Once it is registered at proper authority it becomes a legal document and valid in any Court of law. It is a legal document that allows a property owner to transfer their ownership of their property to another person as a gift.
- No force or coercion while gifting
Gift Deeds once registered properly, become a legal document. Therefore, it implies that there would be no force or coercion while gifting.
- Donee’s role & responsibility
It is very important to know that the acceptance of gifts and registering the document is very much important.
- How to Register the Deed?
In respect of immovable property, register the Deed under Transfer of Property Act and pay required stamp duty based on property value.
Now let’s discuss about important parts of the Gift Deed one by one:-
- The Place & Date
The place and date should be mentioned while executing the Gift Deed
- Details of Doner & Donee
Details of Doner & Donee such as names, addresses, relationship, date of birth, PAN and signatures.
- Property Details
Complete details of the property which is the subject matter of the Gift Deed.
- Declaration
A declaration should be a part of the Gift Deed that gift is made without any monetary consideration.
- Cancellation and or revocation
Mentioning the conditions if any, happening of which result in cancellation and or revocation of the Gift Deed.
- Witnesses
At least two witnesses should bear testimony of the Gift Deed and append their signatures.
Please note the following:-
- In a Gift Deed, Doner is the person who voluntarily transfers ownership of assets. Whereas Donee is the recipient of the Gift.
- Any Individual who is legally competent to contract and who have full ownership on asset being gifted would be a Doner. And Donee can be any person, including minor, Companies, Charitable institutions.
- The gifts to relatives are tax exempt under the Income Tax Act, 1961 subject to conditions to be fulfilled as may require.
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