Whether you’re planning your estate or surprising a family member with a life-changing asset, a gift deed is one of the most effective legal tools for transferring property ownership out of "love and affection." Unlike a traditional sale deed, a gift deed allows for a seamless transition of immovable property without any monetary exchange, offering significant tax advantages and lower stamp duty rates in many regions. However, simply handing over the keys isn't enough; to be legally binding in 2025, a gift deed must be meticulously drafted, registered with the authorities, and accepted by the receiver during the donor's lifetime. In this guide, we’ll break down the essential legal requirements, the latest stamp duty costs, and the tax implications you need to know to ensure your property transfer is both secure and undisputed.
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 registration process
Registering a Gift Deed is an essential step to make the transfer of property or assets legally valid and recognised. Without registration, the gift may not hold legal value, especially in the case of immovable property. Below is a clear and simple explanation of the registration process, explained through key steps:
Drafting the gift deed: The process begins with preparing the Gift Deed document. This draft must clearly mention the details of the donor (the person giving the gift) and the donee (the person receiving it). It should also include a complete description of the property or asset being gifted, along with any conditions attached to the gift, if applicable. The deed must clearly state that the transfer is voluntary and made without any monetary exchange.
Visiting the sub-registrar office: After drafting the deed, both parties need to visit the Sub-Registrar Office within whose jurisdiction the property is located. This visit is mandatory for registering the Gift Deed.
Stamp duty payment: Stamp duty must be paid before registration. The amount depends on the value of the gifted property and the applicable state laws. In many cases, gifting property to close family members attracts concessional stamp duty rates, calculated in Rs.
Execution and witness attestation: The donor and donee must be present at the Sub-Registrar Office along with two witnesses. Everyone involved signs the Gift Deed in front of the registering authority, and the witnesses confirm the transaction.
Registration and verification: The Sub-Registrar verifies identities, documents, and compliance with legal requirements. Once satisfied, the deed is officially registered.
Receiving the registered deed: After completion, a registered copy of the Gift Deed is issued. This serves as legal proof of ownership transfer.
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.
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:
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.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.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.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:
Details of the donor and donee: Full legal names, addresses, and relationships.
Description of the Gift: A clear description of the gifted property or asset.
Free will and consent: A statement that the gift is made voluntarily without coercion.
Transfer of ownership: Confirmation that the ownership rights are being transferred immediately and unconditionally.
Consideration clause: A declaration that the gift is made without any monetary exchange.
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% |
Delhi |
Men – 6% |
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 |
Uttar Pradesh |
Men – 7% |
West Bengal |
Family member – 0.5% of the market value of the property |
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 gift deed 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.
Conclusion
A gift deed is a meaningful and legally sound way to transfer property or assets to your loved ones during your lifetime. By understanding the registration process and legal requirements, you can ensure that the gift is secure, valid, and free from future disputes.
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