What is Gift Deed?

Understand what a gift deed is, its components, documents required, stamp duty charges, and more.
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2 min read
05 August 2025

A gift deed is a legal document used for the transfer of ownership of a property from one person to another as a gift. It is a voluntary act, and the person who gives the gift is known as the 'donor,' while the person receiving the gift is the 'donee.' Gift deeds are commonly used for transferring properties and can be a useful way to pass on assets and wealth.

What is a gift deed

A gift deed is a legal document that allows a property owner to transfer ownership of their property to another person as a gift. It is a voluntary act of giving, and the donee (the recipient) does not have to pay any consideration for the gift.

Key features:

  • The transfer happens willingly and without any payment.
  • Registration is compulsory according to the Indian Registration Act, 1908.
  • Both the person giving and the person receiving must be present during the registration.

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Gift deed format

A gift deed must be executed on non-judicial stamp paper or e-stamp paper, which is available in certain states. The value of the stamp paper would depend on the state in which it is executed and where the property is situated. Each state in India has provisions in respect of the amount of stamp duty payable on the gift deed, and the same would need to be determined based on the specific facts of the case.

Properties transferable through a gift deed

  • A gift deed can be used to transfer:
    • Immovable properties: Land, houses, or apartments, but not crops or timber that are growing.
    • Movable properties: Jewellery, vehicles, or cash.
  • Conditions for a valid transfer:
    • The person giving the gift (donor) must legally own the property.
    • The transfer must happen immediately, with no conditions or future promises.

Advantages of a gift deed

  • Legal validity: A gift deed serves as official proof of the transfer, helping resolve any legal disputes that may arise later.
  • Tax benefits: It provides tax exemptions in certain cases, especially when transferring property to close relatives.
  • Immediate effect: Ownership is transferred right away, unlike a will where transfer happens after death.
  • Revocation clause: The donor can cancel the gift deed under specific legal conditions.
  • Clear ownership: It clearly establishes the donee’s ownership, preventing future claims or disputes.
  • No monetary exchange: The transfer happens without any payment, preserving the nature of a gift.
  • Quick and cost-effective: Compared to a sale, transferring through a gift deed is faster and usually involves lower costs.
  • Avoids probate: The property does not go through probate, making asset transfer smoother.
  • Emotional value: It reflects goodwill and affection by legally gifting assets to loved ones.

These advantages make a gift deed a reliable and efficient way to transfer property or assets legally and with clarity.

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Properties transferable through a gift deed

  • A gift deed allows the transfer of both movable and immovable assets.

  • Immovable assets include land, residential houses, and flats. Agricultural land and forest land may also be included, depending on local laws.

  • Movable assets may comprise jewellery, motor vehicles, antiques, cash, or financial instruments.

  • The donor must have full legal ownership of the asset being gifted.

  • Only existing, tangible assets can be gifted—not future inheritances or expectations.

  • The transfer must be made voluntarily and immediately, without any conditions attached.

  • The property should be transferable under the law and not subject to any legal restrictions or disputes.

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How to revoke a gift deed

To revoke a gift deed, the following conditions must be met, as per Section 126 of the Transfer of Property Act, 1882:

  1. Mutual agreement:
    Both the donor (giver) and the donee (recipient) agree to cancel the gift deed. This agreement must be documented and registered to be valid.
  2. Revocation clause in the deed:
    If the original gift deed includes a clause allowing revocation, the donor can cancel the gift by fulfilling the conditions specified in that clause.
  3. Fraud, coercion, or undue influence:
    The donor can revoke the deed if it was executed under fraudulent circumstances, coercion, or undue influence. The donor must prove these allegations in court.
  4. Failure of conditions:
    If the gift was conditional (e.g., the donee must take care of the donor) and the conditions are not fulfilled, the donor may revoke the deed.

The process involves filing a petition in court, presenting evidence, and obtaining a court order to cancel the deed. The court will then decide whether the revocation is justified based on the evidence and legal grounds.

Components of a gift deed

Here are some important things that should be mentioned in the gift deed format:

  • The place and date on which the gift deed is to be executed
  • Relevant information on gift deed regarding the donor and the donee, such as their names, address, relationship, date of birth and signatures
  • Complete details about the property for which you draft a gift deed
  • Two witnesses to bear testimony of the gift deed and their signatures

Important clauses in a gift deed

When drafting a gift deed in India, several important clauses must be included:

  1. Details of the donor and donee: Full legal names, addresses, and relationships.
  2. Description of the Gift: A clear description of the gifted property or asset.
  3. Free will and consent: A statement that the gift is made voluntarily without coercion.
  4. Transfer of ownership: Confirmation that the ownership rights are being transferred immediately and unconditionally.
  5. Consideration clause: A declaration that the gift is made without any monetary exchange.
  6. Revocation clause: Conditions under which the gift can be revoked, if applicable.

These clauses ensure legal validity and clarity in the gift deed.

Documents required for gift deed registration

The following documents are required for registering a gift deed:

  • Original gift deed
  • ID proof like Aadhaar Card, Driving License among others
  • PAN card of the donor and donee
  • Document such as a sale deed or title deed to prove the ownership of the donor
  • Passport size photograph
  • ID proof of the witnesses

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Stamp duty charges on gift deed registration

Stamp duty charges on gift deed registration vary from state to state. The value of stamp duty payable on a gift deed would depend on the specific facts of each case. Information regarding stamp duty payable can be found on state government websites.

Here are the stamp duty charges in major Indian states:

State

Gift deed

Haryana

Rural – 3%
Urban – 5%

Delhi

Men – 6%
Women – 4%

Karnataka

Family members - Rs. 1,000 to Rs. 5,000

Gujarat

4.9% of the market value

Telangana

Stamp duty - 5% of market valueRegistration fees - 0.5% of the market value

Madhya Pradesh

Family member – 2.5% of the market value of the propertyNon-family member – 5% of the market value of the property

Maharashtra

Family members – 3%Other relatives – 5%Agricultural land or residentialProperty - Rs. 200

Punjab

For Non-family members – 6%

Rajasthan

Women – Up to 4%To wife – 1%Widow – NilImmediate family – 2.5%

Tamil Nadu

Family member – 1% of the market value of the property
Non-family member – 7% of the market value

Uttar Pradesh

Men – 7%
Women – 6%

West Bengal

Family member – 0.5% of the market value of the property
Non-family member – 6% of the market value


Note: Rates may vary based on property location and government updates.

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Who can be a donor/donee in a gift deed?

In a gift deed, the donor is the person who voluntarily transfers ownership of property or assets, while the donee is the recipient of the gift.

  • Donor: Any individual who is legally competent to contract, meaning they must be of sound mind and an adult (18 years or older in India). The donor must also have full ownership of the property or asset being gifted.
  • Donee: Can be any person, including minors, legal entities like companies, or charitable organizations. However, if the donee is a minor, a legal guardian must accept the gift on their behalf.

This ensures that the gift deed is legally valid and enforceable.

What are tax exemptions on property as a gift

What are tax exemptions on property as a gift

When you receive property as a gift in India, it may or may not be taxable, depending on specific criteria set out under the Income Tax Act, 1961. Section 56(2)(x) of the Act governs the taxability of such gifts. In many cases, exemptions apply that can help the recipient avoid paying tax.

1. Gifts received from specified relatives
Any property—movable or immovable—received from a close relative is completely exempt from tax, irrespective of its market value. For this purpose, 'relatives' include parents, spouse, siblings, siblings of the spouse, grandparents, grandchildren, children, and similar lineal relations of the spouse.

2. Gifts on special occasions
Gifts received during significant life events such as weddings, through inheritance under a Will, or in contemplation of death are also exempt from taxation. However, gifts received from an employer or unrelated parties during such occasions may still be taxable.

3. Value-based exemptions
If the cumulative value of gifts received from non-relatives in a financial year is Rs. 50,000 or less, the amount is fully exempt. However, if the total value exceeds this threshold, the entire sum is treated as taxable income under the head "Income from Other Sources."

4. Agricultural land and charity
Transfers of agricultural land within the family or through inheritance are exempt from tax. Additionally, gifts made to approved charitable or religious institutions may be eligible for deductions under Section 80G of the Act.

5. Property without consideration
If property is gifted without any consideration and does not fall under the exempt categories, it becomes taxable in the hands of the recipient. For immovable property, the stamp duty value is considered for tax calculation.

What is the difference between a gift deed and a will

A gift deed is a legal document used to transfer ownership of property or assets from a donor to a donee during the donor's lifetime, without any exchange of money. The transfer is immediate and irrevocable once the deed is executed.

A will, on the other hand, is a legal document that outlines how a person's assets should be distributed after their death. Unlike a gift deed, a will only takes effect after the testator's death and can be altered or revoked at any time before death.

The key difference lies in the timing and revocability of the transfer.

Important rules to remember

  • The gift must be made willingly, without receiving any money or compensation.
  • Both donor and donee must be legally competent and present during the registration process.
  • Only existing, tangible property can be transferred—future assets or expectations are not valid.
  • Registration of the gift deed is legally required and ensures enforceability.
  • Unregistered deeds carry no legal weight and may lead to disputes or rejection by authorities.

Steps to cancel a gift deed

    1. Check the deed for conditions

        ◦ Review the Gift Deed for any revocation clause.

        ◦ If such a clause is absent, legal action is the only option.

    2. Mutual consent of donor and donee

        ◦ If both parties agree to revoke, a deed of revocation must be created.

        ◦ This revocation must be registered at the same office where the original gift deed was registered.

    3. Approach the civil court

        ◦ If the donee disagrees, the donor must file a civil suit for cancellation.

        ◦ The court will assess evidence like fraud, coercion, or violation of conditions.

    4. Secure a court order

        ◦ If the court rules in favour of cancellation, a formal revocation order will be issued.

        ◦ This order must be submitted to the registrar to update the records.

    5. Amend the property records

        ◦ After cancellation, update official property records to reflect the restored ownership.

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Frequently asked questions

Can a property be gifted to a minor?

Yes, a property can be gifted to a minor. However, since minors cannot legally hold property, it must be held in trust by an adult until they reach adulthood.

Can a property received as a gift be sold?

Yes, a property received as a gift can be sold. However, it is important to note that if it is sold within three years from the date of acquisition, it will attract capital gains tax. Want to become a property owner without waiting for a gift? Bajaj Finserv offers home loans with attractive interest rates and approval in just 48 hours. Check your eligibility now. You may already be eligible, find out by entering your mobile number and OTP.

Is a donee liable to pay dues on the gifted property?

Yes, a donee is liable to pay dues on the gifted property after taking possession.

Do I need to pay income tax on a gift deed?

No, you do not need to pay income tax on a gift deed.

Can a gift deed be revoked?

Yes, a gift deed can be revoked if both parties agree to it. However, if there is no such clause in the gift deed, it cannot be revoked.

Is a gift deed considered as a legal document?

Yes, a gift deed is considered as a legal document that proves ownership transfer from one person to another.

What is the purpose of a gift deed?

A gift deed is a legally binding document used to transfer ownership of a property from one individual (donor) to another (donee) without any payment. It formalises the act of gifting and protects both parties by ensuring that the transaction is voluntary, valid, and enforceable by law.

What is the difference between a gift deed and a will?

A gift deed results in an immediate transfer of property once registered, whereas a will only comes into effect after the death of the person making it. Moreover, a gift deed must be registered to be legally valid, while registration of a will is optional.

What properties can be transferred through a gift deed?

A gift deed can be used to transfer both movable and immovable assets such as:

  • Land, flats, or houses

  • Jewellery, cars, antiques, or cash
    The donor must legally own the property and the asset must exist at the time of gifting.

What is the stamp duty for registering a gift deed?

Stamp duty rates for gift deed registration vary by state. For example:

  • Maharashtra: Rs. 200 for close relatives; 3% for others

  • Karnataka: Rs. 1,000 for family members; 5% for others

  • Tamil Nadu: 1% for relatives; 7% for non-relatives
    Always check with your local sub-registrar for the latest applicable rates.
Is it mandatory to register a gift deed?

Yes, registration is compulsory under the Indian Registration Act, 1908. Without it, the transfer is not recognised legally. Registration offers proof of ownership, ensures legal enforceability, and safeguards the interests of both the donor and the done.

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