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PLEADING DRAFTING & CONVEYANCING

LUCKNOW

AN ASSIGNMENT ON “Gift Deed” (UNDER THE SUPERVISION OF Prof)

Pleadings Drafting & Conveyancing

SUBMITTED To:

SUBMITTED BY:

Prof. Faculty of

Hons)* 7th semester

,Lucknow

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ACKNOWLEGEMENT The completion of this Assignment could not have been possible without the participation and assistance of so many people whose names may not all the be enumerated. Their contribution is sincerely appreciated and gratefully acknowledged. However, I would like to express my deep appreciation and indebtedness particularly to the for her endless support, kind and understanding spirit during making of this assignment and To all relatives, friends and others who in one way or another shared their support, either morally, financially and physically, thank you. Above all, to the Great Almighty, the author of knowledge and wisdom, for his countless love. I thank you all.

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Table of content 1. Introduction 2. What is a gift deed? 3. Eligibility for Gift Deed Transfer

4. How to Make a Gift Deed? A. Process of Gift Transfer 

Gift Deed Drafting

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Gift Acceptance

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Gift Deed Registration

5. When to Make a Gift Deed? 6. What Should Be Included in The Gift Deed? 7. How to Make It Enforceable and Legally Valid? 8. What are the charges? 9. Things to remember 10. Can a Gift Deed be challenged? 11. Format of Gift Deed

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Introduction There are various ways through which you can transfer a property that you own. It could be by way of sale, Will or gift. When it comes to transferring a property within family members or giving it away as a gift to another person, it is necessary to legally register the property in the donee’s name (receiver of the property) through the gift deed process. The gift transfer is invalid without legal documentation of the deed, which is different from the usual registration process1. A commonly used method, especially when transferring to a family member or friend, is executing a gift deed in favour of the recipient. Though no monetary transaction is involved, it is still necessary to register the gift deed to make the transfer valid.

What is a gift deed? A gift deed is a legal document that records and details transfer of movable or immovable property from the donor (giver) to the donee (receiver) without any exchange of money. The “gift” must be a well-defined movable or immovable property and be transferable. Under section 122 of the Transfer of Property Act, 1882, ““Gift” is the transfer of certain existing moveable or immoveable 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. Acceptance when to be made. —Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void”. Person can transfer immovable property through a gift deed. Like a sale deed, a gift deed contains details of the property, the transferrer and recipient. But instead of a sale consideration in a sale deed, a gift deed allows the person to transfer ownership without any exchange of money. Registering a gift deed with the sub-registrar is mandatory as per section 17 of the Registration Act, 1908, and as per section 123 of the Transfer of Property Act. If you don’t do this, the transfer will be invalid. Besides that, once a gift deed is registered in the name of the recipient, only then can person apply for mutation of the property. Mutation is necessary to transfer utility connections in the

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http://property.sulekha.com/how-to-transfer-a-property-through-gift-deed_614343_blog

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name of the recipient. Also, for the recipient to be able to further transfer the property, a registered gift deed will be required2.

Eligibility for Gift Deed Transfer To make a gift transfer, the donor should be competent to contract which implies that minor individuals cannot gift a property. However, a minor can accept the gift with a natural guardian as a nominee, who will act as a manager of the property till the donee becomes an adult. The donee should be alive to receive it otherwise the gift deed becomes void.

How to Make a Gift Deed? The deed should be based on the consideration of natural love and affection of the Donor to the Donee. Since there is no monetary dealing involved, there is no tax liability on both the parties (tax exempt). Remember, the donor in the gift deed must be solvent and should not use this arrangement for illegal gains or tax evasion. Transfer of property, specially an immovable one, needs to be documented in accordance with the Transfer of Property Act, 1882 in India and must fulfil the conditions laid out. Registration of the gift deed for an immovable property is mandatory and must be done with the Sub-Registrar in the area where the property is situated. Process of Gift Transfer The legal process of gift transfer involves the following steps: 

Gift Deed Drafting

The gift deed is a legal document between the donor and the receiver which should be prepared with the help of an attorney. The agreement should contain the details of the transferring property and to whom it should be transferred. The gift should be given voluntarily without any compulsion. 

Gift Acceptance

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http://www.livemint.com/Money/PYvt8NpP8AXnea8nKAn9FI/For-a-transfer-of-property-through-gift-deedto-be-valid-it.html

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As per the legal requirement, the receiver should accept the gift during the lifetime of the donor. The gift transfer is valid only if the donee accepts the gift property which is validated by taking possession of it. 

Gift Deed Registration

The registration process takes place according to the registration act of 1908. The title transfer can be performed only on the registered property. At least two witnesses should attest in the gift deed agreement. Usually the number of witnesses’ changes from place to place. After the payment of stamp duty and transfer duty charges, the property can be registered. The stamp duty differs from one state to another. Once the registration is over, the title can be changed. Thus, the property can be transferred from one person to another through the gift deed agreement3.

When to Make a Gift Deed? A Gift deed can be made in the following circumstances: 

At the time of transferring the rights of property as a gift.

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When there is no exchange of money involved.

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To provide a legal representation to the gift being transferred.

What Should Be Included in The Gift Deed? 

Relationship details of the donor with the donee.

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Rights & power and authority of the Donor.

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Description and details of the property to be gifted.

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Confirmation clause on delivery of possession.

How to Make It Enforceable and Legally Valid? Firstly, get the property (to be gifted) valuated by an approved valuation expert. Secondly, assess the stamp duty and other misc charges (The value of stamp duty varies from state to state). Print the gift deed, get signature of two witnesses.

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Keep handy title deeds of the property, encumbrance certificate, statement of particulars of the property at the time of registration4.

What are the charges? Stamp duty and registration fee has to be paid to register a gift deed. In some states, stamp duty rates for property transfer by way of gift is the same as for sale or conveyance deed. However, rules vary across states; certain state governments even offer some concession if the property is being gifted to blood relatives. For instance, in Delhi, the stamp duty in case of property transfer by way of sale or gift deed is the same—4% for men and 6% for women. In West Bengal, the stamp duty for sale or conveyance deed is 5% of the property’s market value in panchayat areas, and 6% of market value in municipal areas5. In case of a gift deed, the rate is the same if the property is being gifted to a non-family member. If recipient is a family member, then only 0.5% of the market value of the property has to be paid as stamp duty6.

Things to remember Once a gift deed of an immovable property is executed in favour of any recipient, the donor does not have the right to revoke or cancel the deed at a later stage, unless there is a specific clause mentioned in the deed7. Section 126 of the property transfer Act provides for a situation wherein a gift deed may be revoked by the donor. For instance, if the property was gifted so that the recipient can reside in it, upon death of the recipient, the property will get transferred back to the donor if she is alive, else to the heirs of the recipient. Such details, however, need to be specifically mentioned in the gift deed8.

Can a Gift Deed be challenged? The gift deed can certainly be questioned in the court of law by filling a suit for such declaration. However, it will be challenged only if you are able to establish that the execution

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http://www.legalserviceindia.com/articles/transfer.htm https://www.e-stampdutyreadyreckoner.com/Gift-Stamp-Duty-Calculator.html 6 http://www.livemint.com/Money/PYvt8NpP8AXnea8nKAn9FI/For-a-transfer-of-property-through-gift-deedto-be-valid-it.html 7 http://economictimes.indiatimes.com/points-to-be-considered-while-drafting-giftdeed/articleshow/4626685.cms 8 http://www.livemint.com/Money/PYvt8NpP8AXnea8nKAn9FI/For-a-transfer-of-property-through-gift-deedto-be-valid-it.html 5

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of the deed was not as per the wish of the donor or was executed under misrepresentation, fraud etc9.

When Gift May Be Suspended or Revoked Section 126 of the Transfer of Property provides for conditions where a gift may be revoked.the following are those conditions(1) That the donor and donee must have agreed that the gift shall be suspended or revoked on the happening of a specified event; (2) such event must be one which does not depend upon the donor's will; (3) the donor and donee must have agreed to the condition at the time of accepting the gift; and (4) the condition should not be illegal, or immoral and should not be repugnant to the estate created under the gift. Section 126 is controlled by sec. 10. As such, a clause in the gift deed totally prohibiting alienation is void in view of the provisions contained in sec. 10. A gift, which was not based on fraud, undue influence or misrepresentation nor was an onerous one, cannot be cancelled unilaterally. Such a gift deed can be cancelled only by resorting to legal remedy in a competent court of law10.

Format of Gift Deed11 This deed of gift is made at ……. this ……. day of. ….. between Mr. A of ……. hereinafter referred to as ‘the Donor’ of the One Part and Mr. B of ……. hereinafter referred to as ‘the donee’, of the Other Part. Whereas the Donor is seized and possessed of the land and premises situate at ……… and more particularly described in the Schedule hereunder written. And whereas the donee is related to the Donor as ……. And whereas the Donor desires to grant the said land and premises to the donee as gift in consideration of natural love and affection as hereinafter mentioned ‘

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http://lawrato.com/indian-kanoon/property-law/can-a-gift-deed-be-challenged-in-india-649 http://www.legalserviceindia.com/articles/transfer.htm 11 http://www.vakilno1.com/forms/gift/gift-353.html 10

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And whereas the donee has agreed to accept the gift as is evidenced by his executing these presents. And whereas the market value of the said property his estimated to be Rs …... Now, this deed witnesses as follows: 1. That the Donor without any monetary consideration and in consideration of natural love and affection, which the Donor bears to the DONEE, both hereby grant and transfer by way of gift the said land and premises situate at …………. and more particularly described in the Schedule hereunder written together with all and singular the buildings, and structures thereon and all the things permanently attached thereto or standing thereon and all the liberties, privileges casements and advantages appurtenant thereto and all the estate, right, title, interest use, Inheritance, possession. benefit, claims and demand whatsoever of the Donor to Have and To Hold the same unto and to the use of the Donee absolutely but subject to the payment of all taxes, rates, assessments, dues and duties now and hereafter chargeable thereon to the Government or Municipality or other Local Authority. And the Donor doth hereby covenants with the DONEE; (a) That the Donor now has in himself, good right, full power and absolute authority to grant the said piece of land and other the premises hereby granted as gift in the manner aforesaid. (b) The DONEE may at all times hereafter peaceably and quietly enter upon have occupy. possess and enjoy the said piece of land and premises and receive the rents, Issues, and profits and rents thereof and every part thereof to and for his own use and benefit without any suit, lawful eviction, interruption, claim or demand whatsoever from or by the Donor or his heirs, executors, administrators and assigns or any person or persons lawfully claiming or to claim by, from, under or in trust for the Donor. (c) That the said land and premises are free and clear and freely and clearly and absolutely and forever released and discharged or otherwise by the Donor and well and sufficiently saved, kept harmless and Indemnified of and from and against all former and other estate, titles, charges and encumbrances whatsoever, had made, executed, occasioned or suffered by the Donor or by any other person or persons lawfully claiming or to claim by. from, under or in trust for the Donor.

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(d) And further that the Donor and all persons having or lawfully claiming any estate or Interest whatsoever to the said land and premises or any part thereof from under or in trust for the Donor or his heirs, executors. administrators and assigns or any of them shall and will from time to time and at all times hereafter at the request and cost of the donee do and execute or cause to be done and executed all such further and other acts, deeds, things, conveyances and assurances in law whatsoever for better and more perfectly assuring the said land and premises and every part thereof unto and to the use of the donee in the manner aforesaid as by the donee, his heirs, executors, administrators and assigns or counsel in law shall be reasonably required. In witness whereof the Donor as well as the donee (by way of acceptance of the said gift) have put their respective hands the day and year first herein above written. The schedule above referred to Signed and Delivered by the within named Donor ……... in the presence of ……. Signed by within named donee ……... In the presence of ……. 1…………… 2……………

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Bibliography 1. Books 

Textbook on Pleading drafting & Conveyancing, by Dr. A. B Kafaltiya

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Textbook on Pleading drafting & Conveyancing, by R.N Chaturvedi

2. Internet Sources  Article  Research Paper 3. Websites 

http://property.sulekha.com/how-to-transfer-a-property-through-giftdeed_614343_blog

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http://www.livemint.com/Money/PYvt8NpP8AXnea8nKAn9FI/For-a-transfer-ofproperty-through-gift-deed-to-be-valid-it.html

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http://www.legalserviceindia.com/articles/transfer.htm

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https://www.e-stampdutyreadyreckoner.com/Gift-Stamp-Duty-Calculator.html

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http://economictimes.indiatimes.com/points-to-be-considered-while-draftinggift-deed/articleshow/4626685.cms

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