As per the Transfer of property act, 1882 a Gift is defined as ‘the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor and accepted by or on behalf of the donee.’
These provisions of Gift provided under this act are not applicable to Muslims.
The definition includes:
- A Transfer which is defined as conveying of property;
- Voluntary transfer by the donor:
- The decision should not reasonably appear to have been taken due to any coercion or fraud.
- A Donor can be any person who owns the property, except a minor. A gift deed by a minor is void.
- For a gift deed to be valid, the soundness of mind of the donor is also essential. The donor must not be insane. A mere weakness of mind is not sufficient to declare the gift deed to be void.
- The subject matter of the gift shall be an existing movable or immovable property not being provided as an exception as per Section 6 of the Transfer of Property Act, 1882.
- A gift comprising of future property is void. A gift with both existing and future property is void to the extent of future property.
- Without any consideration to the donor
- Out of natural love and affection,
- Without any monetary element involved in the transaction.
- Acceptance by donee, made during the lifetime of the donor.
- If the donee dies before accepting the gift, then it becomes void. Thus, ideally, the acceptance given must be recorded at the time of execution of the deed and registration.
- Also, a gift is made to more than 1 donee, and is not accepted by all, then the gift shall be void up to the share/ interest of only those who did not provide the acceptance.
- A minor can be a donee and a natural guardian can accept the gift on his behalf.
What are essentials of a gift deed?
- A gift deed should clearly mention the name and details of the Donor and the Donee.
- State the details of the title and ownership of the Donor.
- Relation between parties, if any
- Details of the property which is the subject matter of the Gift-deed
- Gift deed to be signed by
- the Donor consenting the transfer of subject matter through Gift-deed,
- the Donee accepting the gift, and
- two adult witnesses
- Date and place of execution shall also be mentioned.
How to proceed with registration of gift deed?
As per the Section 123 Transfer of Property Act 1882 and Section 17 the Registration Act, 1908, for a gift deed to be effective, there should mandatorily be a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.
- Mere delivery of the subject matter shall not validate the transfer or the gift.
- Once the Gift deed is duly registered, the transfer of title shall then be made.
- Stamp duty has to be paid for the registration which varies from state to state.
- Stamp duty to be paid is according to the market value of the subject matter, gender of the donor etc (available on the state websites)
- Stamp duty can be paid through a non-judicial stamp paper.
Can gifts be revoked or suspended?
- As per the provisions of the Transfer of Property Act, gifts are possible to be suspended or revoked if the Donor and the Donee have agreed upon it in event of happening of a specified event which does not depend on the will of the Donor.
- This is not applicable when the suspension or revocation of the gift, wholly or in part, is dependent upon mere will of the Donor, and such shall be void, wholly or partly, to the same extent.
- A gift may also be revoked in cases where it would be rescinded if it were a contract.
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