INTRODUCTION

Transfer of Property Act regulates the law relating to the transfer of property in India. It came as a form of the draft bill in 1870 and came into existence in 1882. Before this act, customary laws use to govern the transfer of property but before that customary rules prevailed.

The transfer through Gift deed is one of the modes through which property can be transferred through less hassle yet there are circumstances when transfer by way of gift deed is challenged.  

TRANSFER THROUGH GIFT DEED

Gift is defined under Section 122 of Transfer of Property Act 1882 as ‘transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee’. It is a gratuitous transfer of property. Thus it is a voluntary wish of a person to gift his property or money i.e moveable or immovable property to a person without any consideration or anything in return. It is to be noted that the gift if an immovable property should be registered in order to pass the ownership from the donor to donee. The Indian Registration mandated the registration of the gift deed with sub-registrar.

The transfer or of the gift deed is called the donor and the receiving party is called the transferee or donee. To constitute a valid Gift there are conditions that must be fulfilled. A valid gift shall fulfil the following essentials;

1. Transfer of ownership;
2. The ownership must relate to a property in existence;
3. The transfer must be without consideration;
4. It must have been made voluntarily;
5. The donor must be a competent person;
6. The transferee must accept the gift

To constitute a gift a transfer of property shall be without any consideration by the transferor in favour of another person accepting the gift ‘transferee or donee’. The acceptance of gift can be on behalf of the donee as in case of a minor child. A transfer that is without consideration is called a gratuitous transfer. A Gift may be transferred either inter vivos which is within the meaning of Section 5 of the Act or, testamentary ‘gift mortis causa’.

GIFT TO MINORS VALID?

Though a minor is considered to be incapable of giving consent or accepting things yet a gift can be made to a donee/transferee who is minor. The guardian will be liable to manage the property until the minor attains 18 years of age, following which, the donee can either accept the gift or return it to the donor.

MOVABLE PROPERTY

A person can also transfer movable properties such as vehicles, cash, jewels, ornaments, etc as gifts. The registration of Gift is mandatory in the case of immovable property but in the case of movable property, it is optional. Gift of movable property can be made through a registered deed or by mere delivery of the property as per the will of the donor.

TAXATION OF GIFT

As per Section 56 (2) (vii) of the Income Tax Act, 1961, ‘a gift is not taxable if it is received by an individual or Hindu undivided family from any relatives/blood relatives or as inheritance or at the time of marriage or in contemplation of death. But where in any other context, if the aggregate of gifts received exceeds Rs 50,000 in a year, then the gift will be taxable as income from other sources

CHALLENGING THE GIFT DEED

A gift deed is usually made out of love and affection and the main highlight is that even though there is a donor/promisor and a donee/promise yet there is no contract as there is no consideration. But sometimes  gift made to a person can offend others who have right to it and in other cases, it is alleged by the parties that the gift has been transferred through wrongful means like undue influence, coercion etc. In some of the cases, gift deed are challenged as the parties executing the gift deed do not consider it important to get the deed registered, and later it becomes the ring of war on which both the parties fight for years proving the genuineness of the document. Following are some of the grounds where a party who is offended by the transfer of property through gift can challenge it in the court :

GROUNDS

1. If consent was not free:- There are several alleged scenarios where the person making the gift is influenced by the other people either emotionally or by threat and thus the value of the consent comes to an end and so does the document.
2. If the gift deed is not executed and registered as per legal provisions:- Though a gift deed is valid even if it is not registered but an unregistered gift deed has no value in the eyes of law. A person cannot claim the enjoyment of gift deed by presenting an unregistered gift deed.
3. If the parties not competent:- Even though a gift to a minor is valid yet a gift by a minor is not. Further is the donor is of unsound mind or is not capable of understanding the nature of his/her act he is not considered to be a competent party.
4. If consideration is paid:- Consideration plays a vital role in the transfer of property through gift deed.  If any person proves the fact that the gift was made in lieu of any form of consideration the gift deed stands invalid.
5. If the gift is conditional and the condition is not fulfilled by the recipients’ gift:- Though it is confused many  times that consideration might be the same as fulfilling a condition but they are different.  Fulfilling of the condition is not a reversal of favour in any way, it might be security which the donor might see in his eyes while transferring his property through gift

HOW TO CHALLENGE A GIFT DEED

A person who has any legal right and interest in the property may file a suit when he/ she does not feel justified by a transfer or execution of the gift deed was not as per the wish of the donor and was executed under fraud, coercion, misrepresentation etc. Gift deed can be challenged by such person by filing a suit for declaration in the court of law.

CONCLUSION:- Gift were made by people since a long time ago and earlier there were no such disputes as such but with the changing mentality and culture many people consider the transfer of property as a safe and a way through which future disputes could be hindered. To make the situation balance for those in whose favour gift deed is not made law has provided remedies through which a wrong gift deed can be challenged.