A Gift Deed is a document that records the act of giving without any monetary consideration. A Gift Deed is a legal document that describes the voluntary transfer of gifts from the owner of the property to the receiver of the Gift without any exchange of money. The owner of the property is called the Donor, and the receiver of the property is called Donee. A person who wishes to gift something, i.e., the Donor must be solvent and should not use this tool for tax evasion and illegal gains.
A gift must be one of the following properties:
Drafting of Gift Deed –
Gift Deed is a contract between the Donor and the Donee. It defines the simultaneous and reciprocal act of giving and taking. A gift to be valid must be made by a person voluntarily and not under compulsion without any exchange of money. Sabkuch Legal has the best lawyers who have expertise in drafting Gift Deed.
Acceptance of Gift deed –
Acceptance of the Gift after its execution is a legal requirement, and Donee must accept the Gift during the lifetime of the Donor. In case the Donee fails to recognize the Gift, it is rendered invalid. Possession of the Gift is an act which implies the acceptance.
Registering Gift Deed -
The Gift to be given can be tangible or intangible property, well defined movable-immovable property, transferable, and should be in existence. Unless registration of gift deed is completed, the tile does not pass to the done, in case of Gift of immovable property. Attestation by two witnesses is required during registration and post-registration, the title transfer is possible.
As per the provisions of the Registration Act, 1908, registration involves:
Can a minor be a party to a gift deed?
Contracts with minors are void-ab-inito. A gift deed is a legal contract; Minors are not eligible to be a donor. Therefore, a gift deed where the minor is the Donor is not valid in the eyes of the law. In a circumstance where the Donee is a minor, a natural guardian has the right to accept the Gift on his behalf.
What are the conditions when a gift is revoked?
Section 126 of the Transfer of Property Act prescribes the eventuality where gifts can be suspended or revoked. For talking about the stage where the cancellation comes into pictures, the property needs to be registered first; and the existence of an agreement between the contracting parties stating that the Gift can be withdrawn on the occurrence of particular events. It is advisable to add a clause of revocation while executing the Gift Deed.
Who pays the dues after a property is gifted?
The Donee is responsible for paying the remaining dues once the property is registered in his name. Let’s assume, R got an apartment from his father. His father had to pay Rs 20,000 as utility bills. Now, R will be liable to clear the remaining dues.
How is Gift Deed different from a Will?
The Gift Deed is executed during the lifetime of the Donor, and the transfer happens immediately. In the case of Will, the transfer occurs after the death of the owner. Additionally, the Gift Deed needs to be registered. Transfer using Gift Deeds are tax-free. The Gift Deed is irrevocable post-execution. However, the will can be changed as many times as you want. There is an extra cost in the form of the stamp duty in case of a Gift Deed.