What is a Gift Deed and its format?
A gift is a written document describing the legal transfer of property from one person to another. The owner is called the donor and the one who receives the gift is called the done. Gift deed format does not involve any cash. A donor should not use it as a means of tax evasion. It must not be forceful on the donor to gift the property in question. A gift is always a voluntarily done gesture.
The donor cannot gift money as a gift deed. It must be a transferable property – movable or immovable. A donor cannot gift something of future today. The gift must have an existence today.
A gift is given without any consideration. It is given out of love and affection for a person.
There should be no encumbrance from the property. Donee should not be carrying any burden of charges that the donor was supposed to take care of. The donor needs to discharge all the taxes or charges before transferring the property.
The Process of gifting
Lawyer drafts the gift deed between the donor and the donee. A gift deed contains the information about the property to be gifted. If it is a land or a building, its addresses would be mentioned in the deed. If it is an immovable property say a car, its registration number, colour, details of accessories attached to it, etc would be mentioned in the deed.
Donee should accept the gift during the lifetime of the owner of the transferring property. The donee must take possession of the gift for validation of the acceptance. After accepting the gift, the donee can enjoy the privileges arising out of the use of the gift. Heirs of the donor can make no claim against the property. The donee can use it as he may please. It is advisable to always get the property registered so that the legal title is transferred from the donor to do. In case a dispute arises between the donor and the donee, the done would be at a disadvantageous position if the title of the property is still with the donor.
Transfer of Property Act, 1882 says that the title of an immovable property cannot be passed unless it is registered with the registrar. Registration of a gift deed is governed by the Registration Act, 1908.
Both donor and donee sign the deed. Two witnesses are also needed to sign the deed agreement. Valuation of the property is done by an approved valuation expert. In his valuation report, he specifies the market value of the property. A stamp duty is required to be paid on the property which differs across states. Transfer duty is also needed to be paid. The title is transferred once the registration process is completed.
A minor cannot enter into a contract. Hence, he cannot be a donor in a gift deed. If a minor is a donor in a gift deed, it makes the deed legally invalid.
If a minor is a donee he can accept the gift with the assent of his natural guardian.
A gift deed versus a will
A gift deed is applicable only until the death of the donor whereas a will is applicable only after his death. The donor cannot revoke the transfer of the title once the registration is completed. A will can be changed as many times as the owner wants since it is at his disposal to decide who he wants to be the owner of his possession after he dies. A will is subjected to litigation but a gift deed cannot be litigated.
Not all transfers of property need to be in writing but some are required to be expressed in writing by the law. According to the Indian Registration Act, transfer of any immovable property having a value of more than Rs. 100 should be written and registered. The Donor might ask the donee to return the gift at any time if the deed was done through an oral transfer. The profits arising out of the use of the property would then be subjected to the donor and not the donee. Revocation of a gift is governed by the provisions mentioned in the deed. They may agree to revoke the deed on the happening of a certain event which should be independent of the will of the donor.
Official Government Gift Deed Format in PDF: Click Here
You can use the above gift deed sample to draft a gift deed as per your requirements.