Gift Deed Drafting & Registration

What is a gift deed?

A gift deed is the legal document by which a person – the donor – transfers property to another person – the donee – voluntarily and without any payment. Parents commonly use a gift deed to transfer a house or land to their children, spouses gift property to each other, and people gift property to charities. Once the gift is complete, the donee becomes the full owner.

What makes a gift valid

• Voluntary – the donor gives freely, without pressure, fraud or undue influence.
• No consideration – no money or other value is paid in return.
• Existing property – the property must exist and belong to the donor; future property cannot be gifted.
• Acceptance – the donee must accept the gift during the donor's lifetime. For a minor, a parent or guardian accepts on their behalf.
• Registration for immovable property – a gift of land, a house or a flat must be made by a deed that is stamped, signed by the donor, attested by two witnesses and registered with the sub-registrar.

Movable property such as jewellery, shares or money can be gifted by a registered deed or simply by handing it over, but a written gift deed is useful proof for tax and family records.

Stamp duty and registration

Stamp duty on a gift deed is set by each state and is often lower when the gift is to close family members – some states charge a fixed or nominal amount for gifts to a spouse, children or parents, while others charge a percentage of the property's value. Registration charges are paid in addition. Both the donor and donee (or their attorneys) appear before the sub-registrar with two witnesses. We work out the duty for your state and guide you through registration, and afterwards the donee should apply to have the property records changed to their name.

Income tax on gifts

When the donee later sells the property, the donor's purchase cost and holding period count for capital gains. Income from property gifted to a spouse or minor child may be added to the donor's income for tax.

Can a gift deed be revoked?

Generally, no. A registered gift deed cannot be cancelled simply because the donor changes their mind. It can be set aside if it was obtained by fraud, coercion or undue influence, or revoked on a condition agreed in the deed itself. Under the senior citizens' maintenance law, a gift made by a senior citizen on the condition that the donee will look after them can be declared void by the tribunal if that care is not provided – which is why such conditions should be written clearly into the deed.

Gift deed, will or relinquishment deed?

Before you gift property

Check the title documents and encumbrance certificate, make sure any loan on the property is cleared or the lender agrees, and confirm that all co-owners join in if the property is jointly owned. Our property title verification service covers these checks.