A gift deed is a legal document that transfers the ownership of movable or immovable property from one person to another without any exchange of money. In India, a gift deed is a popular way of transferring property between family members, friends, or business partners. This article will discuss what a gift deed is, how it is made, and its effect in Indian law.

What is a Gift Deed?

A gift deed is a legal document that transfers the ownership of property from one person to another without any consideration. The person who gifts the property is called the donor, and the person who receives the property is called the donee. The gift deed is a binding contract that creates a legal obligation on the part of the donor to transfer the property to the donee without any conditions.

A gift deed can be made for both movable and immovable property. For example, a gift deed can be made for land, buildings, cash, jewelry, or any other asset. The gift deed can be made between family members, friends, or business partners. However, it is essential to note that a gift deed cannot be made for illegal or unlawful purposes.

How is a Gift Deed Made?

A gift deed is made by following a specific legal process. The following are the steps to make a gift deed in India:

Step 1: Drafting the Gift Deed

The first step in making a gift deed is to draft the document. The gift deed should contain the following information:

·         The name and address of the donor

·         The name and address of the donee

·         The description of the property being gifted

·         The value of the property being gifted

·         Any conditions or restrictions on the gift

·         The date of the gift

It is essential to draft the gift deed carefully and accurately to avoid any legal disputes later.

Step 2: Executing the Gift Deed

After drafting the gift deed, both the donor and the donee must sign the document in the presence of two witnesses. The witnesses must also sign the document. The witnesses must be competent to testify in a court of law.

Step 3: Registering the Gift Deed

After the gift deed is executed, it must be registered with the sub-registrar of assurances. The registration process involves paying a stamp duty and registration fee. The stamp duty and registration fee vary from state to state. The registration of the gift deed ensures that the transfer of property is legally valid and binding.

Step 4: Delivery of Possession

The final step in making a gift deed is the delivery of possession of the property. The donor must deliver possession of the property to the donee. The delivery of possession is crucial because it signifies the transfer of ownership from the donor to the donee.

Effect of Gift Deed in Indian Law

A gift deed has several legal implications in Indian law. The following are some of the effects of a gift deed:

1.      Transfer of Ownership

The gift deed transfers the ownership of the property from the donor to the donee. Once the gift deed is registered, the donor cannot revoke the gift. The donee becomes the legal owner of the property, and the donor has no right over the property.

2.      Tax Implications

A gift deed has tax implications in Indian law. If the value of the gift exceeds a certain limit, the donee may have to pay gift tax. The gift tax is calculated based on the value of the gift and the relationship between the donor and the donee.

3.      Succession Planning

A gift deed can be used for succession planning. By making a gift deed, the donor can transfer the ownership of the property to the next generation. This helps in avoiding legal disputes and ensures a smooth transfer of property.

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