A Gift Deed is an instrument or legal document which is used to transfer a gift (movable or immovable property) from one person to another as per the provisions of the law. An Immovable property like land, building or house etc. must be transferred as a gift through Registered Sale Deed only (written form) though the movable property like television, cellphone, refrigerator etc. can be gifted orally or through a Sale Deed.
Essentials of a valid gift:
(i) Transfer of ownership– There must be transfer of ownership in gift which involves the right of receiver to sale the gift.
(ii) Property either movable or immovable. – Gift can be of either movable or Immovable Property.
(iii) Transfer without consideration.. – The gift is generally made for love, affection and devotion not for any price otherwise it will become sale.
(iv) Transfer must be voluntary– Transfer must be made by free consent i.e. not by coercion, fraud, misrepresentation, undue influence or mistake.
(v) Acceptance – Gift must be accepted by or on behalf of the person receiving it (transferee). Acceptance should be made during donor’s life. Non-Acceptance by one of the transferees makes the whole Deed invalid.
(vi) Present property- Gift must be of a property which exists or is owned by donor in present. A gift of property which comes in existence in future or comes in ownership of Donor in future is not a valid gift.
(vii) Donor must be major and person of Sound Mind – A gift by Minor is invalid however the guardian of minor can accept the gift on minor’s behalf. So a minor can be donee but not a donor.
Essentials of a valid gift deed:
- Must be signed by Donor or any person on his behalf (properly executed) – Donor or any other person on his behalf in his presence must have signed the Deed. Donor must have seen the both attesting witness signing on the document, while all being fully conscious of the fact of attestation and execution of Gift Deed as per Section 3 and Section 123 of Transfer of Property Act.
- Must be attested by 2 witnesses. – Both attesting witness must have seen the donor or any other person on his behalf and as per his directions in donor’s presence, signing the Deed or must have received the acknowledgment by the donor of his sign or other person’s sign. It is not necessary that both witnesses should attest at the same time.
- Must be properly stamped – The Payment of proper stamp Duty is necessary to make a Gift Deed valid.
- Must be registered. – The Gift Deed of immovable property must be registered as per Section 17 of Registration Act, 1908, in presence of registering authority like Registrar or Sub-Registrar after payment of registration fees while for movable property it is optional.