What Are The Advantages Of Giving A Gift Deed?

Different Uses of Gift Deed

There are several methods by which a property may pass from the person who owns that property to the donee. This can be accomplished through either a will, sale, or gift. However, the most commonly used method to transfer the property to the family members is to sign the deed of gift on behalf of that person.

Although no financial transaction is included in the gift deed, it is also obligatory to have it recorded.

Section 122 of the Transfer of Property Act 1882 defines the term “gift.”

What All Can be Gifted?

Things that can be gifted should possess these qualities to be considered as a gift –

  1. It should be movable or immovable property.
  2. It must constitute tangible property.
  3. It has to be transferable.
  4. It must exist at present and not be a future property.

Process of Gifting

  • Drafting Gift Deed

With the assistance of a lawyer, the gift deed draft can be prepared that defines the nature of the gift and to whom it is transferred. It’s an agreement between the giver and the donee that specifies the act of giving and receiving. In order to be valid, it must be willingly done by the person and not through pressure.

  • Acceptance of the gift

Once the legal process has been completed, it’s time for the donee to accept the donor’s gift to allow the gift deed to be valid. The acceptance of the gift must be made during the lifetime of the donor. 

  • Registration

A gift of immovable property can not transfer any title until it is registered in accordance with Section 123 of the Transfer of Property Act. The attestation of two witnesses is obligatory during registration and post registration, and then only title transfer is permitted.

How can I get a Gift Deed registered?

The gift deed is registered according to the provisions of the Registration Act, 1908 –

  1. The property’s value is to be gifted by the valuation expert.
  2. Payment of transfer duties and stamp duty differ slightly for men and women (slightly less for women). Stamp duty also differs between states.

Gift Deed in the Event of Minor

Any owner of the property may grant the gift deed in favor of anyone, but there is an exemption to this rule.

In the event that either the donor or donee is a minor, minors are not eligible to contract. Therefore, they cannot give a property as a gift.

  • If the donor is a minor, then the gift deed is unenforceable.
  • If the recipient is a minor, then the natural guardian can accept the gift on behalf of the child.

Guardian is a manager of the property that is gifted to the minor. If the gift is too burdensome, the responsibility for the gift cannot be imposed upon the child until they are minor. When the donee turns major, the donee can either choose to accept or give back the gift to the donor.

Is Oral Gift of Immovable Property Valid?

As per section 123 of the transfer of property act, a gift of immovable property that isn’t legally registered cannot be considered a valid gift under the law. Delivering the gift without completing the legal documentation cannot grant any kind of title.

Gift Under Hindu Law

According to the Hindu legal system, giving a gift through legal formalities is not required. But, a gift under the law cannot be valid without the transfer of possession of the subject of the gift from the giver to the receiver.

The property that can be gifted

  1. Any Hindu can dispose of his property through a gift, which is his property, or self-acquired property.
  2. Fathers can also sell their property via a gift, whether it is self-acquired or inherited.
  3. A woman can also dispose of her stridhan through a gift, subject to, in some instances, her husband’s permission is necessary.
  4. A widow can also dispose of her property through gifts that she has received from her spouse.
  5. The person who owns the impartible state can also dispose of his/her property via gift unless an ordinance prohibits him/her from disposing of property through gifts.

Gift to Unborn Child

According to pure Hindu law, gifts made to someone who is not present at the moment of making the gift are considered invalid. However, this rule has been modified by these laws, namely:

  1. The Hindu Transfers and Bequest Act, 1914.
  2. Hindu Disposition of Property Act, 1916
  3. The Hindu Transfer and Bequest Act (City of Madras), 1921

Essentials of a Valid Gift

  • Declaration

The giver should have a clear intention to make the gift to someone else. The donor’s declaration clearly indicates that the person making the gift is willingly giving a gift in the name of another person.

A declaration can be made in written form or orally, depending upon the circumstances. The donor may declare to give any property in writing or verbally. According to Muslim law, making a declaration in writing is not required to transfer the gift.

  • Acceptance
  1. It must be accepted by the recipient. If the recipient does not accept the gift, it will become invalid.
  2. It is not required for the receiver to be a Muslim to accept the gift. To accept the gift, the recipient can be from any religion. A gift for children and females is also acceptable.
  3. A baby in the mother’s womb is also a valid donee if the child is born within six months after declaring a gift in his/her favor.
  4. The gift can also be made to a business, a close company, a corporate body, or a trust.
  5. Anyone who is a guardian of the child or the insane is eligible to receive the gift.

The Guardians who can receive the gift on behalf of the mentally ill or minor are:

  1. Father
  2. The executor of the father
  3. Paternal grandfather
  4. The executor of the paternal grandfather.
  • Possession Delivery and acceptance of the Gift

The word possession in Muslim refers to only the nature of the subject is capable of. Therefore, the real test of delivery of possession is to determine who will receive the benefits of the gift, whether it is the donor or the receiver.

If the benefit of the gift was utilized by the donor, the gift becomes invalid.

The method of transferring possession of the gifts is contingent on the type of property. There are two basic ways of delivery of possession:

  1. Constructive
  2. Actual
  • Constructive Delivery

Constructive delivery of possession is the transfer of property in a symbolic manner. Constructive delivery of possession is the possession in which property is not delivered to the recipient, but rather the donor has performed something that could be seen as a sign that possession has been given. However, as the property is of such nature that physical delivery of the possession is not possible, then the constructive possession of the property can be sufficient to complete the act of gift.

  • Actual Delivery

Actual delivery of possession means that the property is delivered physically to the recipient. The actual delivery of possession occurs when the property is tangible (which can be seen or touched) and is handed over to the donee.

Examples of tangible movable property include bags, chairs, laptops, mobile phones, and more. Examples of tangible immovable property are land, houses, and so on.