Gift Deed in India – How to Gift Property, Registration & Tax Implications 2025

Want to gift property to child? Transfer house to spouse? Gift land to relative?

Gift deed is legal way to transfer property without sale. But wrong documentation can create disputes and tax problems.

Let's understand everything about gifting property legally in India.

What is Gift Deed?

Gift deed = Legal document transferring property from donor (giver) to donee (receiver) voluntarily without consideration (payment)

Key elements:

• Voluntary transfer

• Without payment/consideration

• Irrevocable (can't take back once accepted)

• Immediate transfer of possession

• Mutual consent

Governed by: Transfer of Property Act, 1882 (Section 122-129)

What Can Be Gifted?

Movable property:

• Cash, jewelry, shares, mutual funds

• Vehicles

• Bank deposits

Immovable property:

• House, flat, land

• Commercial property

• Agricultural land (restrictions in some states)

This article focuses on immovable property (house/land)

Who Can Gift (Donor)?

✓ Owner of property (clear title)✓ Major (18+ years)✓ Sound mind (not mentally unsound)✓ Not under coercion/fraud/undue influence✓ Must have right to transfer

Co-owners: All must consent to gift

Who Can Receive (Donee)?

✓ Any person (major or minor)✓ Family members (common)✓ Non-relatives (also allowed)✓ Trust/charity✓ Company/LLP

Minor can receive (through guardian)

Why Gift Property?

Common reasons:

✓ Estate planning - Transfer to children during lifetime✓ Tax planning - Save capital gains tax (compared to sale)✓ Avoid partition - Give specific property to specific child✓ Convenience - Easier than will (takes effect immediately)✓ Love and affection - For family members✓ Charity - Donate to trust/NGO

Gift Deed Requirements:

For valid gift of immovable property:

1. Written document (gift deed)

2. Registered at Sub-Registrar office (mandatory!)

3. Acceptance by donee (in gift deed itself or separate document)

4. Delivery of possession (immediate, can be symbolic like handing keys)

Without registration: Gift is VOID (Section 123, Transfer of Property Act)

Gift Deed Format:

GIFT DEED

This Gift Deed is executed at [City] on this [Date] day of [Month], [Year]

BETWEEN:

DONOR:
[Full Name]
Son/Daughter of [Father's Name]
Age: [Age] years
Residing at: [Complete Address]
PAN: [PAN Number]
Aadhaar: [Aadhaar Number]
(hereinafter called "Donor")

AND

DONEE:
[Full Name]
Son/Daughter of [Father's Name]
Age: [Age] years
Residing at: [Complete Address]
PAN: [PAN Number]
Aadhaar: [Aadhaar Number]
(hereinafter called "Donee")

WHEREAS:

1. The Donor is absolute and lawful owner of the property described in Schedule hereunder, having acquired the same through [Sale Deed/Inheritance/etc.] dated [Date] registered as Document No. [Number] at Sub-Registrar Office, [Location].

2. The Donor, out of natural love and affection for the Donee [who is son/daughter/wife/etc. of the Donor], desires to gift the said property to the Donee.

3. The Donee has agreed to accept the gift of the said property.

NOW THIS DEED WITNESSETH AS FOLLOWS:

1. GIFT: The Donor hereby transfers, by way of gift, all his/her right, title, and interest in the property described in the Schedule hereunder to the Donee absolutely and forever.

2. CONSIDERATION: This gift is made out of natural love and affection for the Donee, who is [relationship], and without any monetary consideration.

3. ACCEPTANCE: The Donee hereby accepts this gift of the said property.

4. POSSESSION: The Donor hereby delivers actual and physical possession of the said property to the Donee, who takes the same.

5. RIGHTS AND LIABILITIES: All rights, easements, and appurtenances belonging to the said property shall vest in the Donee. All taxes, charges, and liabilities in respect of the said property from the date of this deed shall be borne by the Donee.

6. FURTHER ASSURANCE: The Donor shall, at the request and cost of the Donee, execute all such documents and do all such acts as may be necessary to give effect to this gift.

7. IRREVOCABLE: This gift is irrevocable and cannot be recalled or cancelled by the Donor.

SCHEDULE OF PROPERTY:

[Detailed description of property]
- All that piece and parcel of [land/flat/house] bearing No. [Property Number/Flat No./Survey Number]
- Situated at [Complete Address with landmarks]
- Measuring [Area in Sq. Ft./Sq. Meters/Acres]
- Bounded by:
  North: [Boundary]
  South: [Boundary]
  East: [Boundary]
  West: [Boundary]
- Or as more particularly described in [Sale Deed/Title Deed] dated [Date] registered as Document No. [Number]

IN WITNESS WHEREOF the Donor and Donee have set their hands on the day and year first above written.

SIGNED AND DELIVERED BY:

DONOR:                                 DONEE:
[Signature]                            [Signature]
[Name]                                 [Name]
[Date]                                 [Date]

WITNESSES:

1. [Name, Address, Signature]

2. [Name, Address, Signature]

Documents Required:

From Donor: ✓ Original title deed of property✓ PAN card✓ Aadhaar card✓ Address proof✓ Passport size photos✓ Property tax receipts (latest)✓ NOC from society (if flat in society)✓ Encumbrance certificate (no dues certificate)✓ Property valuation certificate (for stamp duty calculation)

From Donee: ✓ PAN card✓ Aadhaar card✓ Address proof✓ Passport size photos

Additional (if applicable): ✓ NOC from co-owners✓ NOC from bank (if property mortgaged - loan clearance needed)✓ Death certificate (if gift by legal heir)✓ Succession certificate✓ Marriage certificate (if gifting between spouses)

Registration Process:

Step 1: Draft Gift Deed

Options:

• Hire lawyer (₹3,000-10,000)

• Use online legal platforms (₹2,000-8,000)

• DIY (use format above, but risky)

Ensure:

• Property description accurate

• Donor and donee details correct

• Relationship mentioned

• No consideration stated clearly

Step 2: Property Valuation

For stamp duty calculation:

• Get property valued

• Stamp duty calculated on market value or ready reckoner rate (whichever higher)

• Valuer or use government ready reckoner

Step 3: Purchase Stamp Paper

Stamp duty amount varies by state

Typical rates (as of 2025):

For gifts to relatives:

• Maharashtra: 3% for blood relatives, 5% for non-relatives

• Delhi: 4% for women, 6% for men (between relatives); higher for non-relatives

• Karnataka: 1% (close relatives), 5% (non-relatives)

• Tamil Nadu: 2-7% depending on relationship

• Gujarat: 3-4.9%

• Uttar Pradesh: 2-5% for relatives

• Rajasthan: 5-6%

Relationship matters: Lower stamp duty for blood relatives (parents, children, siblings, spouse) in most states

Check your state's current rates!

Purchase:

• From authorized stamp vendor

• Treasury

• Or pay online (e-stamping in many states)

Step 4: Print Gift Deed

On stamp paper (of correct value) OR attach e-stamp

Step 5: Book Appointment (If Available)

Many states allow online slot booking:

• For Sub-Registrar office visit

• Reduces waiting time

Step 6: Visit Sub-Registrar Office

Both donor and donee must be present

Also bring:

• 2 witnesses (with ID proof)

• All original documents

• Gift deed (printed on stamp paper)

• Extra copies

Step 7: Verification

Sub-Registrar:

• Verifies identities (Aadhaar/PAN)

• Checks documents

• May ask questions to ensure voluntary gift

• Confirms donor is of sound mind

Step 8: Biometric and Photos

Digital process:

• Fingerprints taken

• Photos clicked

• Recorded in system

Step 9: Signing

All sign in presence of Sub-Registrar:

• Donor

• Donee

• Witnesses (2)

• Sub-Registrar attests

Step 10: Payment of Registration Fee

Typically 1% of property value (varies by state)

Example:

• Property value: ₹50 lakh

• Registration fee: ₹50,000

Step 11: Registration Complete

Gift deed registered in official records

You receive:

• Registered gift deed (with registration number and date)

• Certified copies

Timeline: Same day (2-4 hours) in most places

Step 12: Update Records

After registration, update:

• Municipal records - Property tax in donee's name

• Electricity/water - Transfer connections

• Society records - If flat in society, transfer membership

Stamp Duty Concessions:

Lower stamp duty for:

✓ Gifts between blood relatives:

• Parents to children

• Between siblings

• Between spouses

• Grandparents to grandchildren

✓ Gifts to women:

• Some states charge lower stamp duty if donee is woman

✓ Charitable gifts:

• To registered trusts/NGOs

• May be exempt or reduced (state-specific)

Tax Implications:

For Donor:

No capital gains tax!

• Gift is not "sale"

• No consideration received

• No tax liability for donor

This is major advantage over sale

For Donee:

Income Tax:

Received from relatives: Tax-free (Section 56(2) Income Tax Act exempts gifts from relatives)

Received from non-relatives:

If property value > ₹50,000: Taxable as "income from other sources"

• Entire property value added to income

• Taxed as per slab

Who are "relatives" (tax-exempt):

• Spouse

• Siblings

• Spouse's siblings

• Parents

• Spouse's parents

• Children (including adopted)

• Children's spouses

• Lineal ascendants/descendants

Example:

• Uncle gifts property worth ₹50 lakh to nephew

• Uncle is not "relative" as per IT Act

• Nephew must pay tax on ₹50 lakh (added to his income!)

Huge tax burden if from non-relative!

Property Tax:

After gift:

• Donee becomes owner

• Responsible for property tax

• From date of registration

Can Gift Be Revoked?

General rule: NO

Gift is irrevocable once:

• Deed registered

• Possession delivered

• Accepted by donee

Exceptions (gift CAN be revoked):

1. If gift deed has revocation clause:

• Must be explicitly mentioned at time of gifting

• Grounds for revocation specified

• Valid if agreed by both

2. Fraud/Coercion:

• Gift obtained by fraud, misrepresentation, or under duress

• Can approach court to cancel

3. Condition not fulfilled:

• If gift conditional and condition not met

• E.g., "Gift valid if donee takes care of donor" and donee doesn't

4. By mutual agreement:

• Both donor and donee agree to cancel

• Execute cancellation deed

• Register it

Otherwise, gift is final!

Gift Deed vs Will:

Aspect	Gift Deed	Will
Effect	Immediate	After death
Registration	Mandatory	Optional (but recommended)
Revocation	Generally NO	Yes (anytime before death)
Possession	Immediate	After probate
Stamp duty	High	Minimal
Tax	On donee (if non-relative)	Estate duty (not applicable now)
Disputes	Less (immediate, registered)	More (challenges after death)

Gift gives immediate ownership, will takes effect after death

Gift vs Sale:

Aspect	Gift	Sale
Consideration	No payment	Payment
Tax on transferor	No capital gains	Capital gains tax
Stamp duty	Lower (for relatives)	Higher
Tax on receiver	Taxable (non-relatives)	No (buyer paid for it)
Relationship	Usually family	Anyone

Disputes and Remedies:

Common disputes:

1. Gift challenged as not voluntary:

• Claim of coercion/fraud

• Donor or donor's heirs challenge

Defense: Proper documentation, witnesses, Sub-Registrar verification

2. Gift to child, other children claim share:

• Parents gift to one child, others feel deprived

Solution: Parents free to gift to any child. Other children have no claim (unless share in ancestral property).

3. Donor becomes financially dependent:

• Gifted all property, now penniless

• Donee not caring for donor

Prevention: Gift with condition of maintenance OR retain life interest (right to live/use property till death)

4. Creditors of donor:

• Donor gifts to avoid paying debts

Risk: Gift can be challenged as fraudulent transfer

Tips for Safe Gifting:

✓ Get legal advice before gifting

✓ Think long-term (irrevocable!)

✓ Clear title - Ensure no disputes on property

✓ Loans cleared - No mortgage on property

✓ Tax implications - Understand for both parties

✓ Relationship proof - If claiming tax exemption

✓ Keep financial security - Don't gift all property

✓ Consider life interest - Right to use till death

✓ Will alternative? - If want flexibility, make will instead

Conclusion:

Gift deed is powerful estate planning tool when done correctly. Understand stamp duty, tax implications, and legal requirements to avoid disputes.

Key points:

• Must be registered (mandatory!)

• Lower stamp duty for gifts to relatives

• Tax-free for donor (no capital gains)

• Tax-free for donee if from relatives

• Generally irrevocable

• Immediate transfer of ownership

Planning to gift property? Consult lawyer and do it right!