Gift Deed

A Gift Deed becomes valid only if it is given out of natural love and affection by one family member/ friend to another, of course without any money being exchanged.

A Gift Deed, as we understand pertains to a legal document that voluntary transfers a property to the receiver of the gift, without any monetary consideration. Therefore, there has to be donor who intends to transfer the property and a donee who has to accept the Gift. Under Indian law Section 122 of the Transfer of Property Act, 1822, elaborates how a donor can transfer an existing movable or immovable property to the donee of their own accord. However, a Gift Deed becomes valid only if it is given out of natural love and affection by one family member/ friend to another, of course without any money being exchanged. Furthermore, under Section 17 of the Registration Act, 1908, it is mandatory to get a registered Gift Deed done, if you intend to transfer immovable property. However, a Gift Deed is irrevocable after the execution is completed.

Procedure to Register a Gift Deed:

Under the Indian Registration Act, the process for registering a Gift Deed is as under:
 
(1)   Get the property valued by a approved valuer to know the actual market value of the property.
(2)   Prepare a draft of the Deed with the intending donor and donee.
(3)   Get the requisite stamp duty paid as per the local Stamp Act,
(4)   After payment of stamp duty fix a date for registration and get the document registered after the donor and donee sign the same.
(5)   Get 2 witnesses to witness the registration.
 
Types of properties that can be gifted
 
The following properties can be gifted.
 
(1)   The property should be tangible in nature and capable of being transferrable.
 
(2)   It can be a movable or immovable property.
 
(3)   It has to have existence in the present and cannot be pertaining to some future property.
 
Gift Deed in Relation to a Minor:

A Minor is incapable of contracting and such contracts are void ab initio. Hence, a minor cannot transfer or Gift any property, even he intends to. Likewise if the minor is the donee, then his natural or legal guardian can accept it on his behalf and be the caretaker of the Gift, till the minor attains majority.
 
 
Cancellation of a Gift Deed

Under Section 126 of the Transfer of Property Act 1882 provides the conditions for the cancellation of a Gift Deed under the following conditions:-
 
1) Mutual Consent: If the donor and the donee have mutually agreed that the gift be suspended or revoked upon the happening of an event, which should be expressly laid down. This condition maybe laid down in the Deed or in a separate and independent document. However, it has to be part of the original transaction and is not dependent on the Will of the donor. If the Will of the donor is written as a condition, then the Gift is void ab-initio.
 
2) Rescission of the contract: If is proved that the gift was not made voluntarily and without consent of the donor, the gift must be revoked. If the antecedent contract itself is rescinded or revoked there is no question of transfer under gift being made. Therefore, it should be examined under Section 19 of the Indian Contract Act, which provides that if the consent to an agreement was obtained by coercion, undue influence, fraud or misrepresentation then the gift is not made voluntarily and needs to be revoked by the donor.

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