PROCEDURE FOR REGISTRATION OF GIFT DEED

GIFT DEED

A Gift Deed is a legal document that represents a transfer of gift from one person to another as per the provisions of the law. Gift Deed is a legally binding written document defined in Section 122 of the Transfer of Property Act, 1822, through which the donor can transfer an existing movable or immovable property to the donee voluntarily.

A Gift Deed is valid only if it is given out of love and affection, without any consideration in return by one family member/ friend to another. Also, under Section 17 of the Registration Act, 1908, it is mandatory to have a registered Gift Deed when you want to transfer immovable property.

The Section 17 of the Registration Act of 1908 states that, individuals must validate gift deed through registration with sub-registrar. Furthermore, section 123 of the Act indicates that an unregistered gift deed shall be deemed invalid.

Following are instructions to register the gift deed:-

A certified professional will evaluate the property related to the gift deed.
A gift deed will be signed by the donor and the donee in the presence of two witnesses.
Approach to the nearest sub-registrar to submit the signed documents.
Hire a lawyer for the calculation of the registration charges*, including stamp duty. You need to Pay the prescribed fees.
Attest the deed

Before proceeding to registration, make sure your deed is drafted in accordance with the law, and also the wishes of the Donor and the Donee. The break up for the procedure of registration can be done as follows:

Sign the Deed (both the Donor and the Donee) in the presence of 2 witnesses and take the signed document to the nearest Sub-registrar Office. When saying ‘nearest’, it refers to the Sub-Registrar Office nearest to the immovable property.
Calculate the Registration charges with the help of lawyers or consult LegalDesk.com to get an accurate measure.
Pay the registration charges stipulated and get the deed attested.

Necessity of Registration

Any Gift Deed, movable or immovable, if contested in court will stand as an upholding or supporting evidence only if it is registered. Although the Gift Deed of a Movable property doesn’t mandate registration in the Transfer of Property Act, you may or may not register. However, it is important to remember that an unregistered Gift Deed is not legally secure.

On the other hand, the transfer of an immovable property under Chapter 17 (a) of The Registration Act, 1908 the Gift Deed instrument is made compulsory.

Also, registration begs the assent of both the parties, i.e., the Donor and the Donee.

There may be instances where you might want to gift an expensive car, villa or a property and chances though few, are the Donee may refuse to accept the Gift. Apart from rendering the Gift Deed void from the beginning, it cannot be registered.

The following properties can be gifted by making a Gift Deed in India:

A movable or immovable property;
An existing property;
A tangible property;
A transferable property;

Who can be a donor and donee under Gift Deed in India

A donor is any person who makes the transfer of the immovable property. Any person who is of a sound mind and is competent to enter into any agreement can be a donor. Any minor cannot be a donor as he or she is not capable of entering into a contract.

A donee is any person who accepts the gift or transfer made to him. A minor can be a donee however, the gift would have to be accepted by the guardian of the donee on behalf of him or her. In case of the onerous gift i.e. a gift attached with certain conditions), a minor after attaining his or her adulthood, can either accept the gift or return it.

Essential documents required for Gift Deed Registration in India

After making sure that the Gift Deed is signed and attested by the witnesses, the applicant is required to pay the stamp duty and registration charges as per the state regulations. The applicant is needed to carry a few other essential documents which are as follows:

Aadhar Card of the applicant;
Identity Proofs, like Driver License, Passport, etc;
PAN card of both the parties for execution of the Gift Deed;
Original Gift Deed that is to be executed;
A document like Sale deed to prove the title of the donor to the Property;
A total of two witnesses are required at the time of execution of Gift Deed;
The Encumbrance Certificate;
A document certifying the Ready Reckoner Value; and
Any other agreements which the applicant might have entered into concerning Property;
Other essential materials as may be required according to the state requirements

The applicant might need some other documents, as the above-mentioned list is not exhaustive. The applicant may need to add certain documents like certificates relating to the value of property depending on the different state, etc.

The applicantis required to mention certain important things in a Gift Deed being a critical legal document.

Those important things are as follows:

Clause for Consideration

This clause should be mandatorily mentioned in the Gift Deed that there should notbe any exchange of money or any other type of consideration is involved, and the such a transfer of property is being made out of love and affection. The transfer will not be considered as a gift if there is any amount of relevant consideration irrespective how small it is.

Free Consent

The transfer by the donor should be free from any kind of undue influence, fear, coercion, or threat. The gift should clearly mention that transferor has a very clear intention of doing such a transfer, and the transfer is voluntary.

Rights and Liabilities

If any kind of additional rights or liabilities are attached under this clause, it is required to be declared in the gift deed. The entitlements may include any such rights concerning the further leasing or sale of the deedsupplementary.

Property Details

An exhaustive description of the gifted property must be included. The description may specify the structure, address, color, area, location, etc.

Possession of Property

It would be best if the applicanthimself or herself is the titleholder of that immovable property in the possession, i.e. the property applicant wants to gift. The property should exist while making a gift of the same because a donor cannot gift anything that he/she possibly can get in the future.

Details of Donor and Donee

To justify clearly, whether the donor and donee are blood relatives or not, the relationship between both of them is important to note. Some state governments in India also offer a concession on the stamp duty if gift deedis made to blood relatives.

Delivery Clause

A delivery clause in Gift Deed, will confirm the delivery of the possession of the property. This clause generally talks about the actions of the transfer of property ‘expressly or implied’.

Rights of Donee

A distinct sign of the rights of Donee creates an attached part of the Gift Deed in India. This clause includes the rights of donee to make changes to property, enjoy the property peacefully, and get rents or any kind of profits from that gifted property.

Clauses for Revocation

It is always advisable to avoid any kind of future complications; however, it is not mandatory. The donor and donee both are required to get agreed on this clause, which should be mentioned, not implied.

The registered gift deed holder shall be liable to apply for the property’s mutation. The mutation process is an essential part of the property sector, which advocates the transferability of the utility connections in favor of the beneficiary. The beneficiary must tender to a registered gift deed to further transfer the property.

REFERENCES:

https://www.myadvo.in/blog/gift-deed-registration-everything-you-need-to-know/
https://corpbiz.io/learning/procedure-for-gift-deed-registration-a-step-by-step-guide/
https://legaldesk.com/property/how-to-register-a-gift-deed
https://www.lawnn.com/gift-deed/
https://swaritadvisors.com/gift-deed

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