A deed of gift is not just a piece of paper. It is a token of love and affection; a way of expressing care and concern to loved ones. It is also a way of thanking one’s relatives for taking care in old age. A ’gift’ in legal terms signifies the transfer of a property- whether movable or immovable under conditions specified in the Transfer of Property Act, which is a central legislation applicable to the state of Gujarat.
Section 122 of the Act says that ‘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 donee, and accepted by or on behalf of the donee.
The above definition says that there should exist the following ingredients in order to constitute a gift.
- There should be a specific property. It means that it should be related to an identifiable property.
- The donor should have existing rights over the said property. It cannot be a property which will be vested in him in the future.
- The property may be movable or immovable.
- The transfer should be made voluntary- not under threat, duress or undue influence.
- The transfer should be accepted by the donee.
- The acceptance may be made by the donee himself or on his/her behalf if the consent of the donee is not valid in case of being under legal age or due to any other incapacity.
The Act further says that the acceptance should be made during the lifetime of the donor and while he is still capable of giving. This is mentioned in order to contrast it with Will, since only a Will can be used to transfer a property legally after the death of a person. In case the donee dies before giving the acceptance, the legal validity of the deed will be compromised as well.
How To Gift A Property Using A Gift Deed?
Section 123 of the Transfer of Property Act lays down the procedure for gifting a property. It says that an immovable property can be gifted only through a registered instrument called a gift deed.
Registration involves visiting the concerned Sub-registrar office and fulfilling certain procedures along with payment of requisite stamp duty and registration fees. After that, the property title passes on to the donee. According to Indian Laws, immovable property means land and things attached to it including buildings. However, standing timber, grass and growing crops are not considered as immovable property.
A movable property may be gifted just by delivery of physical possession. The process of gifting is as simple as delivery of goods.
It may be noted that only existing properties may be gifted under the Transfer of Property Act. A property which is not yet owned by the donor cannot be gifted even if such property will be vested in him/her in the future. Any gift deed which mentions present and future properties will be void to the extent of the future properties involved.
If a gift is made to more than one person and one or more of them does not accept it, it will be invalid only to the extent of the part of property which he or she would have gained had they accepted that gift. It does not affect the overall validity of the gift.
Can a Gift Deed Be Revoked?
A gift deed cannot be revoked except under the following circumstances. A donee may agree that a gift may be suspended or revoked on the happening or not happening of an event. However, such contingency should not be an event which can happen at the will of the donor. Any deed which is agreed by the donees to be revocable merely at the will of the donor is void.
Stamp Duty Requirement And Registration
A Gift Deed is a compulsorily registrable document under the Indian Registration Act, 1908. The stamp duty requirements in Gujarat are governed under the Bombay Stamp Act, 1958. Section 28 of the Act says that gift deeds for immovable property should be 3.5 percent of the market value of the property to be gifted.
Once the stamp duty and registration charges are paid, the concerned sub registrar files it in the register. This completes the registration.
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