Gift Deed

What is a gift deed?

A gift deed is an understanding that is utilized, when an individual wishes to gift his property or cash to another person. It very well may be a moveable or resolute property that is gifted intentionally, from the benefactor to the donee. A gift deed permits the land owner to gift the property to anybody and dodges any future debate emerging out of progression or legacy claims. An enlisted gift deed is likewise proof in itself and dissimilar to on account of a will, the exchange of property is moment and you won’t be expected to go to the courtroom for its execution and subsequently, it additionally saves time.

Does a gift deed require stamp duty?

Yes, stamp duty must be paid on the gift deed. The amount of stamp duty and registration charges payable are usually the same as in the case of a regular sale. However, if the gift deed is executed between some specified close relatives, certain states provide concessions in stamp duty.

Who should pay stamp duty on the gift deed?

If the donee pays the stamp duty, it can amount to consideration (price) paid by the donee for the gift under the Transfer of Property Act. Since there cannot be a consideration in a gift deed, the deed may be considered void when the donee pays the stamp duty. So, the donor is responsible for paying the stamp duty.

Can the gift deed be cancelled?

The donor can revoke/cancel a gift transaction through a provision mentioned in the gift deed or by mutual understanding between the two parties or upon the happening of an event mentioned in the deed. A gift transaction can also be cancelled if the donor signed the deed under undue influence or coercion.

What is the meaning of attestation of a gift deed by two witnesses?

Attestation of a gift deed by two witnesses means that the witnesses who sign the deed should have seen the donor signing the gift deed, and they should sign as witnesses in the presence of the donor and donee.

Important clauses

Here are some important things that should be mentioned in the gift deed.

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There’s no money or force involved

Make sure that you add this consideration clause to the gift deed. It must be indicated that there is no exchange of money and that the gift deed is made solely out of love and affection and not due to money or coercion.

You are the owner of your property when you gift

Only the owner can gift a property. If you are not the owner (title holder) of the property, you cannot gift it to someone else, even in anticipation.

Describe the property

All information pertaining to the property, such as the structure, type of property, address, area, location, etc., must be mentioned.

Relationship between the donor and the donee

If the donor and donee are blood relatives, some state governments may offer a concession on stamp duty. Even otherwise, it is important to establish the relationship between the donor and donee.

Mention liabilities

If there are rights or liabilities attached to the gift, such as whether the donee can sell or lease the property, etc., such clauses should be mentioned.

Delivery clause

This mentions the expressed or implied action of delivery of possession of the property.

Revocation of the gift

The donor can also mention clearly if he/she wants a revocation clause to be adhered to the gift deed by the donee. Both, the donor and donee, must agree on this clause.

Clauses in a

Gift Deed

Details of Donor and Donee

The gift deed should mention the name, address and relationship between the donor and donee. 

Consideration

The gift deed should mention that the donor is transferring the gift property out of love and affection towards the donee, and there is no consideration of any other type involved in the transfer. 

Voluntary Transfer

The gift deed should mention that the donor is voluntarily and freely transferring the ownership of the gift property to the donee. The transfer shall be free of any fear, coercion or threat. 

Ownership of Property

The gift deed should mention that the property is in existence and the donor is the absolute owner of the gift property, and the donor has delivered the possession of the gift property to the donee. 

Property Details

The gift deed should specify the detailed description of the gift property. 

Rights of the Donee

The gift deed should mention the rights of the donee. It includes the rights of the donee to enjoy the property peacefully and sell or mortgage or lease the property. 

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