Transfer of movable and/or immovable property by the owner of the property to another person, without any consideration or any monetary benefits, such a transfer will be termed as “Gift”.

Transfer of Property Act is the major legislation in India governing the Gift Deed.

Section 122 of the Transfer of Property Act, 1882 defines “Gift” as transfer of certain existing immovable or movable property, made voluntarily and without consideration, by the donor to the donee.

Time and again various courts have held that the transfer by virtue of Gift Deed must be of existing property and not of future property and any such future property Gift shall be null and void.

Moreover, any valid owner of an existing property can gift its property to the donee. Although, a gift by the minor is void as a minor is incompetent to gift property. However, the minor’s guardian can accept the Gift on his behalf.

And lastly, the Gift Deed must be out of love and affection and must not involve any kind of consideration. As held by Karnataka High Court in the case of Padmavati Bai & Ors. V. Ushabai. The Court clarified this position and held that any Gift Deed involving consideration on the part of the donee shall make the Gift Deed null and void.

REGISTRATION OF A GIFT DEED

Both the movable and immovable property can be transferred by virtue of Gift Deed. However, it is necessary to get the Gift Deed registered in case the value of the property is more than Rs. 100.

Furthermore, the Supreme Court in the landmark case of Commissioner of Income Tax Kanpur v. Dr. R.S. Gupta clarified the position regarding registration in the case of movable properties.

Supreme Court held that when the Gift is of movable property and the property has been delivered by the donor to the donee, the transfer of such movable property is being completed by virtue of such delivery and hence, there is no need for registration.

However, in the case of immovable property of more than Rs. 100, registration is compulsory, and any Gift Deed of immovable property of more than Rs. 100 without registration cannot be enforced in the court of law.

The position regarding registration has been further clarified by the Bombay Provincial Court in the case of Nana Bin Lakshman And Ors. vs Anant Babaji, wherein it clarified that registration of a Gift Deed of immovable property becomes necessary when the value of the property is more than Rs. 100.

REQUIREMENTS OF REGISTRATION OF GIFT DEED

As per Section 123 of the Transfer of the Property Act, for a Gift of immovable property to be constituted as properly valid, transfer of the Gift must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses.

Supreme Court in the case of Hafeeza Bibi And Others v. Shaikh Farid (Dead) By Lrs. And Others clarified this point and held that ‘writing is not essential to the validity of a Gift either of movable property or of immovable property.’

Supreme Court further clarified that a Gift of immovable property of which the donor is in actual possession is not complete unless the donor physically departs from the premises with all his belongings.

Supreme Court further clarified the essential of a valid Gift of movable and immovable property in the case of Mahboob Sahab v. Syed Ismail And Others and reiterated that in order to constitute a Gift as a valid gift, Section 148 clearly requires that donor must completely divest himself completely of all ownership and domain of the property which is being gifted.

Furthermore, Section 152 of the Transfer of Property Act envisages that where the donor is in possession, a gift of immovable property of which the donor is in actual possession is not complete unless the donor gives physical and actual possession of the property to the donee.

The Registration Act, 1908, is governing the registration of the Gift Deed. For a valid registration following points must be kept in mind:

• The property which is to be gifted has to be valued by an approved Valuer;
• Stamp duty and transfer duty shall be 4% of the value of the property if the donee is a woman and 6% if the donee is a man;
• Registration fees shall be 1% of the total value + Rs.100/- as pasting charges;
• Lastly, the Stamp Duty – which shall be 4% in case of property being gifted to a female and 6% in case the property is being gifted to a male.

Note: Stamp Duty may differ in accordance with Stamp Duty Act of the State where the Property is situated.

PROCEDURE OF REGISTRATION OF GIFT DEED

Documents Required

• Original and Duplicate copies of Gift Deed;
• 2 passport size photographs of all the parties i.e. the donor, the done, and both the witnesses;
• Proof of the land register card to indicate that the land/property does not belong to the government (it can be received from the City Survey Department);
• Proof of municipal tax bill to mention the year in which the land was built/ constructed;
• Proofs of the PAN cards of all the parties are obligatory;
• Photographs and signatures of all parties are mandatory.

CONCLUSION

Thus, the Transfer of Property Act is the guiding Act, which provides for all the provisions regarding the gift deed, how it can be transferred and what constitutes a valid transfer.

Thus, the transfer of immovable property must be through a registered document, duly executed and registered before the registrar.

Further, in case of movable property being gifted, delivery of the property will constitute a valid gift and hence, there is no compulsory registration in case of movable property.