Gift Deed

Legal conditions for a valid gift

• Under the Transfer of Property Act, 1882, a gift is a voluntary transfer of existing property without any payment. If any money changes hands, the document is not a gift.
• The donor must be an adult of sound mind who owns the property or the share being gifted. A co-owner can gift only their own share.
• The gift must be accepted by the recipient during the donor's lifetime. If the recipient dies before accepting, the gift fails.
• A gift of immovable property must be made by a registered deed, signed by the donor and attested by at least two witnesses.
• Once registered and accepted, a gift generally cannot be cancelled. It can be revoked only in limited cases, such as an agreed condition in the deed or fraud. Under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, a senior citizen can seek to cancel a gift if the recipient fails to provide the basic needs promised.
• Under Muslim personal law, an oral gift (hiba) with delivery of possession can be valid, but a written and registered deed is still advisable for property records.

What affects the total cost

• Stamp duty, which is calculated on the market value or the government circle rate of the property, whichever is higher, and varies by state.
• The relationship between donor and recipient, because some states charge reduced or fixed stamp duty for gifts within the family.
• Registration fee at the Sub-Registrar office, usually linked to the value of the property.
• Charges for obtaining supporting papers, such as an updated property tax receipt, society no-objection or a mutation copy.
• Mutation fees for updating the property in municipal or revenue records in the recipient's name after registration.

How long it takes

Drafting is quick once the title documents are available, but valuation and stamp duty calculation take time because the circle rate for the locality and the type of construction has to be checked. E-stamp purchase and booking a slot at the Sub-Registrar office usually take a few days. The donor, recipient and two witnesses then attend registration. Delays usually come from incomplete title papers, a pending loan on the property, a name mismatch with old records or a leasehold property that needs the authority's permission.

Common mistakes to avoid

• Gifting a property that still has a home loan or mortgage without the bank's consent.
• Writing a payment or 'consideration' into the deed, which turns it into a sale and changes the stamp duty.
• Assuming a notarised gift deed is enough for property, when an unregistered gift of immovable property is not valid.
• Not checking whether the property is leasehold, so the transfer is not recorded with the development authority.
• Forgetting to update mutation, property tax and electricity records, which leaves the recipient unable to prove possession later.

What you get at the end

You receive the registered original gift deed with the Sub-Registrar's endorsement and a scanned copy. The recipient uses it to apply for mutation in municipal records, update the property tax account, transfer electricity and water connections, and change the name in society records. Gifts to relatives as defined in income tax law are generally not taxed in the recipient's hands, but keep the deed for future income tax and capital gains records.

In Delhi NCR

• In Delhi, stamp duty on gift deeds is calculated using the circle rates notified for the locality category, and payment is made by e-stamp through SHCIL.
• Registration in Delhi happens at the Sub-Registrar office covering the property's area. Property tax mutation is done with the municipal corporation (MCD) or NDMC, depending on the area.
• For DDA leasehold flats that have not been converted to freehold, transfer usually needs DDA's permission or conversion first, so this should be checked before the deed is signed.
• Gurugram and Faridabad (Haryana) and Noida and Ghaziabad (Uttar Pradesh) have their own rules and concessions for gifts within the family. In Noida and Greater Noida, transfer also has to be recorded with the development authority.
• Outside Delhi NCR, the team can guide you online on the stamp duty factors and documents for your state, and coordinate drafting where possible.