How to execute a gift deed
Executing a gift deed is less cumbersome than executing a Will. While executing a Will you are more concerned about your entire estate, besides dealing with the intricate problem of sharing and bequeathing them among your legal heirs.Whereas, while executing a gift deed you are dealing with just one or two immovable properties and while dealing with a movable property you are gifting it away rather in a hassle free manner to the person of your choice without creating any record.
Therefore the act of gift may be defined as the transaction involved between a donor and a donee pertaining to a movable or immovable property without any consideration. The act of gift is complete once the transaction is over when the donee accepts the gift from the donor.
When a donor gives away the movable property to a donee, no gift deed is required.The title over the gift (movable property) passes on from the donor to the donee, once the gift from the donor is accepted by the donee and the act of gift is complete.
However, if an immovable property is gifted away by the donor to the donee, he must necessarily create a written record in favor of the donee. In India, a gift deed involving the transaction of the immovable property must be necessarily created and registered so as to comply with the provisions of the Transfer of Property Act. Only through registration, a gift deed becomes valid and the title of the immovable property passes on from the donor to the donee.
A gift deed at the option of the donor is created in favor of a donee under the following circumstances:-
- When the donor gifts away his or her immovable property to a donee, then a gift deed is necessarily required and so it is created in favor of the donee.
- A donor out of his love and affection may pick and choose a person perhaps from one of his legal heirs or even a third party as donee for gifting away his immovable property in appreciation of his or her selfless service rendered to him and with an idea of rewarding it in a befitting manner.
- A donor may choose one of his legal heirs as donee that is physically challenged or disabled who needs more care and additional moral and material support, for creating a gift deed in his or her favor.
- Sometimes, a donor may realize the fact that his sons and daughters may not take care of his spouse in case of his death. Then he may proceed to execute a gift deed in favor of his spouse gifting away some of his immovable properties so as to ensure her secured future and safety.
- Sometimes a senior citizen who has no spouse or sons or daughters but only a distant legal relative as his legal heir may be forced to create a gift deed in his or her favor with a fervent hope that his distant relative may look after his estate and take care of him as well.
- A gift deed may also be created by a donor in favor of a deity in a temple or church or even a mosque gifting them specific immovable property.
Unlike a Will, though the act of gift is generally considered as an act of benevolence, the law is not lenient and it has laid down its own strict rules in creating a gift deed and they may be summed up as follows:
- To create a gift deed there must be a donor and donee.
- The recitals of the gift deed are reduced into a written format.
- A gift is complete once the donor gives and the donee accepts it. Until the donee accepts a gift, there is no valid gift.
- A gift deed is created without any consideration.
Before proceeding to drafting any gift deed, it is always good to engage the services of a lawyer or a licensed document writer, so as to know the correct legal position and to avoid any unnecessary complications that may arise in future. When the gift deed is created between the donor and the donee pertaining to an immovable property but without consideration, it should be necessarily registered in the registered office within whose jurisdiction the immovable property is situate. However for the purpose of paying stamp duty, the actual market value of the gifted property should be specifically mentioned. The gift deed should specifically mention correct particulars of the donor, donee,the date, month and year of the gift deed. It should state the reason why the donor creates a gift deed in favor of the donee. The gift deed should contain the complete details of the immovable property in a separate schedule such as location, Taluk or district, registration district, survey number and door number etc. The gift deed should also mention the fact whether the gift has been duly accepted by the donee. Above all, the gift deed should also contain the assurance that the donor will never cancel the gift and even if it is cancelled by the donor it will in no way affect the validity of the gift. Thus once a valid gift is made, based on which a valid gift deed is created. In the common legal parlance, so as to bring out the incontrovertible nature of the gift, it is said in a lighter vein: ‘If you put or gift away the alms in the begging bowl of a beggar, it cannot be taken back.’ .