Specimen Gift Deed — explained: this guide covers what Specimen Gift Deed — means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
What Is a Gift Deed?
A gift is the voluntary transfer of property by one person (the donor) to another (the donee) without any consideration (without receiving anything in return). Under Section 122 of the Transfer of Property Act, 1882: "Gift is the transfer of certain existing movable or immovable 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." The key elements are: (a) voluntary transfer, (b) existing property, (c) without consideration, (d) donor's intention to give, and (e) donee's acceptance.
A Gift Deed is the legal document evidencing this transfer. For immovable property: the gift deed must be registered under Section 123 of the TPA and Section 17 of the Registration Act, 1908. For movable property: the gift can be made by delivery of possession — no registered deed is required (though a written deed is advisable for valuable items).
Legal Requirements for a Valid Gift
Section 122 — Essentials: (a) The donor must be competent to contract (major, of sound mind, not disqualified by law). (b) The donee must accept the gift during the donor's lifetime and while the donor is still capable of giving. (c) Acceptance may be express or implied (taking possession constitutes acceptance). (d) The property must exist at the time of the gift (future property cannot be gifted). (e) The gift must be voluntary — no fraud, coercion, or undue influence.
Section 123 — How gifts are made: (a) Gift of immovable property: MUST be registered — "the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses." (b) Gift of movable property: can be made either by a registered instrument or by delivery of the movable property.
Section 126 — Revocation: A gift may be revoked ONLY if: (a) the donor and donee agree that on the happening of a specified event (not dependent on the donor's will), the gift shall be suspended or revoked, AND (b) that event occurs. A gift CANNOT be revoked merely because the donor changes their mind — once accepted, it is irrevocable (unless the conditions above are met). Under Muslim law: gifts (Hiba) can be revoked in certain circumstances before delivery of possession.
Specimen Gift Deed — Immovable Property
DEED OF GIFT
This Deed of Gift is made and executed on at
BY:
Mr./Ms. , aged years, son/daughter of , residing at , PAN: (hereinafter called the "Donor")
IN FAVOR OF:
Mr./Ms. , aged years, son/daughter of , residing at , PAN: (hereinafter called the "Donee")
WITNESSETH:
WHEREAS the Donor is the absolute owner of the immovable property described in the Schedule hereto, having acquired the same by under , registered at Sub-Registrar's Office , bearing Document No. .
AND WHEREAS the Donor, out of natural love and affection for the Donee (who is the Donor's ), and without any consideration whatsoever, desires to gift, grant, convey, and transfer the said property to the Donee absolutely and forever.
AND WHEREAS the Donee has agreed to accept the said gift.
NOW THIS DEED WITNESSETH that the Donor, out of natural love and affection and without any monetary consideration, doth hereby voluntarily and absolutely give, grant, convey, transfer, and assign unto the Donee, ALL THAT piece and parcel of immovable property described in the Schedule hereto, together with all buildings, structures, fixtures, fittings, easements, privileges, and appurtenances thereunto belonging, TO HAVE AND TO HOLD the same unto the Donee absolutely and forever, free from all encumbrances, charges, and claims whatsoever.
The Donor hereby declares and covenants that:
(a) The Donor has good and marketable title to the said property and has full right and authority to gift the same.
(b) The said property is free from all encumbrances, mortgages, liens, charges, court attachments, and third-party claims.
(c) All property taxes, municipal charges, and utility bills have been paid up to the date of this Deed.
(d) The Donor has not created any prior charge or encumbrance on the said property.
(e) This gift is made voluntarily without any fraud, coercion, or undue influence.
The Donee hereby accepts the said gift and acknowledges receipt of possession of the said property with effect from the date of execution and registration of this Deed.
SCHEDULE — Property Description
All that piece and parcel of bearing , situated at , admeasuring , bounded as follows: North: [_], South: [_], East: [_], West: [_].
IN WITNESS WHEREOF the Donor has executed this Deed of Gift on the day, month, and year first above written.
DONOR: | DONEE:
WITNESSES: 1. | 2.
Registration and Stamp Duty
Registration: Mandatory for gifts of immovable property — Section 123 TPA and Section 17 of the Registration Act. The deed must be registered at the Sub-Registrar's Office within whose jurisdiction the property is situated, within 4 months of execution. Both donor and donee must be present (or represented by PoA holder). Documents required: gift deed (original + 2 copies), PAN and Aadhaar of both parties, property documents (previous sale deed, encumbrance certificate, tax receipts), photographs.
Stamp Duty: Varies significantly by state and relationship:
| State | Blood Relatives | Others |
|---|---|---|
| Maharashtra | Rs. 200 (within specified relatives) | Same as sale deed (3-6%) |
| Delhi | Same as sale deed (4-6%) | Same as sale deed (4-6%) |
| Karnataka | Concessional rate for family members | Same as sale deed (5.6%) |
| Tamil Nadu | 1% (for relatives) | 7% (same as sale) |
| UP | Concessional for blood relatives | Same as sale deed |
Income Tax Implications of Gift
Under Section 56(2)(x) of the Income Tax Act, 1961:
(a) Gifts from specified relatives (spouse, brother, sister, parents, children, and their spouses, any lineal ascendant/descendant): FULLY EXEMPT from income tax — regardless of amount.
(b) Gifts from non-relatives: If the aggregate value of gifts received during a financial year exceeds Rs. 50,000: the ENTIRE amount (not just the excess) is taxable as "Income from Other Sources." For immovable property: the stamp duty value is considered for determining the threshold.
(c) Gifts on specified occasions: Gifts received on marriage, under a will or inheritance, in contemplation of death, from local authority/fund/trust/university, and from any hospital/medical institution are exempt regardless of the donor-donee relationship.
(d) Capital gains on gifted property: For the donee who later sells the gifted property: the COST OF ACQUISITION is the cost at which the DONOR acquired the property (substituted cost under Section 49(1)). The period of holding includes the donor's holding period. This affects capital gains calculation on eventual sale.
Gift Deed vs Will — Which Is Better?
| Feature | Gift Deed | Will |
|---|---|---|
| When effective | Immediately — during donor's lifetime | Only after death of testator |
| Registration | Mandatory (immovable property) | Optional (but recommended) |
| Revocability | Generally irrevocable once accepted | Revocable any time during lifetime |
| Acceptance | Donee must accept during donor's lifetime | No acceptance needed during lifetime |
| Tax | May attract stamp duty and income tax | Inheritance is exempt from income tax |
| Disputes | Harder to challenge (registered, accepted) | More frequently contested by heirs |
Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure accuracy based on the latest laws and amendments, readers should consult a qualified professional before acting on any information provided. For expert assistance, contact us.