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A gift means a transfer of property from one person to another without any monetary consideration. The nature of property may be movable or immovable. While the law requires that every agreement should have a consideration, the consideration or remuneration for a gift is natural love and affection. The person who makes the gift deed is called a donor and the person who receives the property is called a donee.

The Transfer of Property Act of 1882 says: ‘Gift’ is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donor, and accepted by or on behalf of the donee.

Thus the main ingredients that constitute a valid gift are:

1. There must be a donor, donee and property- either movable or immovable
2. The transfer must be by free will on part of the donor
3. The transfer must be accepted either by the donee or by his authorised representatives/legal heirs

Only a person who is competent to contract according to the Indian Contract Act, 1872 can create a gift deed. It means that he/she should have attained the age of majority; should not be of unsound mind or expressly prohibited under any law applicable to him/her. However, a person incompetent to contract can be the donee in a will.

Acceptance, Revocation and Unconditional Transfer

Acceptance is a very important element of a gift deed. Section 122 of the Transfer of property Act says that the acceptance should be made during the lifetime of the donor and while he is still capable of giving. It also says that if the donee dies before such acceptance is made, the gift becomes invalid. It is essential that possession of the property mentioned in the gift deed is transferred to the donee.

The deed can mention that it may be suspended or revoked based on the happening or not happening of any event which is not in control of the donor. All rights regarding the property must be transferred by the donor without him reserving any right for himself. Though there is no financial consideration involved, it is ideal to mention the market value of the gift property in the deed. A gift deed is valid for existing properties only. It should not include future properties. Any such deed shall be void to the extent of the part that includes future properties.

The provisions of the Transfer of Property Act is applicable to the territory of Delhi as with the rest of India. The Act says that all gifts of immovable properties should be registered compulsorily, while gifts of movable properties can be completed either through a registered deed or just by delivery.

The Act also speaks of onerous gifts – or gifts which imposes obligations on part of the donee. It says that if the transaction involves several gifts, of which one is onerous; the donee shall not be bound by the onerous gift unless he accepts the transaction fully. If the gift involves two or more transactions, the donee is at the option of rejecting the transaction that involves obligations. If a donee is not competent to contract, he/she is not bound by the obligations on onerous gifts accepted. However, when the disqualifications is removed, he/she will become bound by such obligations as soon as he/she becomes competent to contract.

The Act further states that when a gift comprises of a donor’s whole property, the donee shall be responsible for the liabilities of the donor to the extent of the property as existed while making the gift. The said Act does not apply to gifts of movable properties made in contemplation of death and gifts made under Mohammedan Law.

Registration Of Gift Deed In Delhi

The Registration Act of 1908 which governs deeds in Delhi, mentions that registration of gift deeds is compulsory.

• The property which is to be gifted has to be valued by an approved Valuer.
• Stamp duty and transfer duty shall be 4% of the value of the property if the donee is a woman and 6% if the donee is a man.
• Registration fees shall be 1% of the total value + Rs.100/- as pasting charges.

Applications for registration needs to be done at the concerned Sub Registrar office of the district. The usual response time is around 15 days.

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