Gift deed is a legal document where a movable or immovable property is transferred from one individual (donor) to another (donee), without monetary or other consideration. Gifting is generosity, and legal backing for such arrangements is necessary. Most jurisdictions have made registration of gift deeds necessary for the legal validity and enforceability of the transfer. Therefore, let us know about the procedure for gift deed registration.
About Gift Deed
- Similar to a sale deed, a gift deed has particulars about the property, gift giver or donor, and donee. Since the gift deed just gives the receiver ownership, it is not concerned with financial transactions.
- In order for a gift deed to be enforced in court, it must be registered.
About the Provision
- Section 17 of the Indian Registration Act of 1908 dictates that a gift deed must be registered, failing which the deed shall not be imposed. Consequently, if the document is not registered, it shall be treated void under Section 123 of this Act.
- In addition, the holder of the registered gift deed will be responsible for applying for the property's mutation.
- The property industry, which promotes the transferability of utility connections in the beneficiary's favour, depends heavily on the mutation process. A gift deed shall further not render the beneficiary capable of transferring the property further unless it has been duly registered in favour of the beneficiary himself/herself.
Required Documents for Gift Deed Registration
Gift deed registration is done in the office of the Registrar or Sub-Registrar. However, some crucial identity and property documents are to register a gift deed are as follows:
- Original Gift Deed
- Identification Documentation, like a driver's license or Aadhaar card, etc
- PAN cards for both the recipient and the donor
- Proof of ownership from the donor, like a title deed or sale document
- A passport-sized photo
- Proof of witness identification and address
Process for Gift Deed Registration
- The property linked to the gift deed will be checked by a qualified specialist.
- A gift deed will be signed by the donee and the donor in front of two witnesses.
- Deliver the signed paperwork to the nearest sub-registrar.
- To determine the Gift Deed Registration Charges, including stamp duty, seek legal advice. The necessary Gift Deed Registration Fees must be paid.
- It is necessary to pay the registration fees for the gift deed.
- In order to register a gift deed, stamp duty and registration costs must be paid.
- In India, just like with sale deeds, the state government sets the registration fees for gift deeds. The market value of the specified property is utilized to determine its worth before calculating the gift deed registration cost.
How Gifting Process Works in India?
Making a Gift Deed Draft:
- The first step to gifting a gift deed is well-determined by preparing an right one. A lawyer's help with the drafting of the gift deed is indispensable in this case since he or she will be preparing the gift deed.
- The specifics of the donee and the asset that is intended to be transferred are usually enclosed in the draft.
- It should be mentioned that gift deeds should not be used for financial transactions.
Acceptance of the Property:
- As per the existing law, during the lifetime of the donee, he must accept the property or asset in question.
- Otherwise, it becomes void and will have no effect.
Registration:
- Section 123 of the Transfer of Property Act does not treat any unregistered gift deeds as legal documents.
- At least two witnesses must be present when the gift is perfected.
Advantages & Disadvantages of Gift Deed Registration
Advantages:
The advantages of a gift deed over a will are as follows:
- While a will becomes effective when the testator is deceased, a deed of gift is carried out immediately after the agreement between a donor and beneficiary regarding the transference of property.
- Gift deed registration is free from litigation, on the other hand, a will permits the owner to take legal action if there is a disagreement. Legal consulting is one way to take legal action.
- Property transferred through a gift deed is exempted from taxes.
Disadvantages:
The disadvantages of a will over a gift deed are illustrated in this list. They are as follows:
- A will is changeable and can be altered as often as the owner is alive, but a gift deed cannot be cancelled after it has been executed.
- Additional stamp duty expenses apply when registering a gift deed. States have different obligations.
Can a Gift Deed be Revoked?
A gift deed can be revoked. Section 126 of the Transfer of Property Act, 1882, says if the donor and donee mutually agree to revoke a gift deed, any "power of revocation should be included in the deed." This statute states that a gift deed can only be revoked in the following situations:
- When the gift deed must be revoked in accordance with a contract between the giver and the beneficiary. The donor cannot take back the gift deed at their own discretion. The giver's unilateral cancellation of the gift deed renders it void.
- Except in cases of non-payment or inability to provide compensation, a gift deed may be terminated in the same manner as a contract.
- It is possible to revoke a gift deed entirely or in part.
The aforementioned grounds do not allow for the cancellation of a gift deed. It should be mentioned that a deceased donor's legal heirs may withdraw the gift deed on their behalf.
Conclusion
Remember that the gift deed is not for children. According to the rules, children are not permitted to sign contracts or give property to third parties. A donee's guardian may receive the gift on his or her behalf if the donee is a minor. Until the donee is an adult, the guardian will continue to register the gift deed and fulfill their exclusive obligations as the property's owner.
The process of registering a gift deed is significant because it protects the beneficiary of the deceased and the owner. An easy transfer of ownership can be ensured if individuals duly follow the aforementioned steps and comply with the specified legal requirements. One must always consult a legal expert to avoid mistakes and manage complicated cases with ease.
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