How To Prepare A Gift Deed In India?

What Is a Gift Deed?

A gift deed is a legal document that records the voluntary transfer of ownership of movable or immovable property from one person, known as the donor, to another person, known as the donee, without any monetary consideration. Unlike a sale deed, a gift deed does not involve payment, and unlike a will, the transfer takes effect immediately during the lifetime of the donor.

Gift deeds are commonly used for transferring property within families, such as parents gifting property to children or spouses transferring ownership to each other.

Legal Framework Governing Gift Deeds in India

Gift deeds in India are governed by Sections 122 to 129 of the Transfer of Property Act, 1882. As per the Act, a gift is defined as the voluntary transfer of an existing movable or immovable property without consideration, which must be accepted by the donee during the lifetime of the donor.

For a gift deed to be legally valid:

• The donor must be the lawful owner with a clear title
• The property must exist at the time of gifting
• The gift must be voluntary and free from coercion
• The gift must be made without any consideration
• The donee must accept the gift while the donor is alive

Key Components of a Gift Deed

A well-drafted gift deed must include the following components:

• Details of the donor and donee, including names, addresses, and relationship
• Complete description of the property being gifted
• Transfer clause expressing the donor’s intent to gift the property
• Acceptance clause confirming the donee’s acceptance
• Date of execution
• Signatures of the donor, donee, and at least two witnesses

Properties That Can Be Transferred Through a Gift Deed

A gift deed can be used to transfer both movable and immovable properties, provided the donor has complete ownership.

Immovable Property

• Residential property
• Commercial property
• Agricultural land

Movable Property

• Jewellery
• Vehicles
• Shares, stocks, and securities
• Artwork and collectibles

The property must be legally transferable and free from disputes or encumbrances.

Gift Deed for Movable vs Immovable Property

For immovable property, such as land or buildings, registration of the gift deed is mandatory under the Registration Act, 1908. Without registration, the transfer is not legally valid.

For movable property, registration is not compulsory. However, executing a written gift deed is recommended for documentation and income tax compliance.

Format of a Gift Deed

A standard gift deed format includes:

• Title: Gift Deed
• Date of execution
• Details of donor and donee
• Description of the gifted property
• Consideration clause stating the gift is made out of love and affection
• Transfer clause
• Acceptance clause
• Signatures of donor, donee, and witnesses

How to Register a Gift Deed in India

Registering a gift deed is mandatory for transferring immovable property and ensures the transaction is legally valid and enforceable.

Step 1: Draft the Gift Deed

The gift deed must be drafted clearly, mentioning details of the donor and donee, property description, transfer clause, and acceptance clause.

It should state that the gift is voluntary and without any consideration.

Both parties must review the document to ensure accuracy before execution.

Step 2: Calculate and Pay Stamp Duty

Stamp duty is calculated based on the market value or circle rate of the property, whichever is higher, and varies by state.

Many states offer concessional stamp duty rates for gifts made to blood relatives.

Stamp duty can be paid through e-stamping or authorised banks as per state rules.

Step 3: Execute the Gift Deed

The donor and donee must sign the gift deed in the presence of at least two witnesses.

Witnesses must be adults and capable of understanding the transaction.

All signatures must be completed before presenting the document for registration.

Step 4: Visit the Sub-Registrar’s Office

The donor and donee must visit the Sub-Registrar’s office where the property is located.

The deed must be presented within four months from the date of execution, as required under the Registration Act, 1908.

Late presentation may attract penalties.

Step 5: Document Verification

The Sub-Registrar verifies the identity proofs of the donor, donee, and witnesses.

Property ownership documents are checked to confirm legal title.

Biometric verification or photographs may be taken as part of the process.

Step 6: Pay Registration Fees

Registration fees are charged as per state government rules and may be a fixed amount or a percentage of property value, subject to a maximum cap.

This fee is payable separately from stamp duty.

Payment can be made through approved online or offline modes.

Step 7: Registration and Endorsement

Once verification is complete, the Sub-Registrar registers the gift deed and endorses it with an official seal and signature.

The registered gift deed becomes legally binding from this point.

The original registered document is returned to the donee for record-keeping.

Also Read – Stamp Duty for Gift Deed 2026: Registration & Charges

Documents Required for Gift Deed Registration

• Original gift deed
• Stamp duty payment receipt
• Identity proof of donor and donee
• Address proof of donor and donee
• Proof of ownership of the property
• Passport-size photographs
• Identity proofs of witnesses
• No Objection Certificate, if applicable

Stamp Duty on Gift Deed in India

Stamp duty on a gift deed is governed by state stamp laws. It is calculated on the property’s market value or circle rate. Many states offer reduced stamp duty rates for gifts made to blood relatives, while others apply standard property transfer rates.

Registration charges are payable separately and vary by state.

Income Tax Implications of Gift Deed in India

Under Section 56(2)(x) of the Income Tax Act, 1961, gifts received from specified relatives such as parents, children, spouses, siblings, and lineal ascendants or descendants are fully exempt from income tax, regardless of value.

If a gift is received from a non-relative and its market value exceeds ₹50,000, the entire value becomes taxable in the hands of the recipient. The donor is not liable to pay tax on gifting property.

How to Cancel or Revoke a Gift Deed

As per Section 126 of the Transfer of Property Act, 1882, a registered gift deed is generally irrevocable. However, it may be revoked under specific circumstances:

• Mutual consent of both donor and donee
• Existence of a revocation clause agreed at execution
• Proof of fraud, coercion, misrepresentation, or undue influence

Without these conditions, a gift deed cannot be unilaterally revoked once registered and accepted.

Gift Deed vs Will in India

Disclaimer – Stamp duty, registration charges, and tax implications for gift deeds vary by state and are subject to change. This content is for general informational purposes only and should not be treated as legal advice.

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FAQs

What is the procedure for gift deed in India?

The procedure for a gift deed in India involves drafting the gift deed, paying applicable stamp duty, signing the deed with at least two witnesses, and registering it at the local sub-registrar’s office. Registration is mandatory for immovable property to make the transfer legally valid.

What is the simple format of gift deed?

A simple gift deed format includes the title of the deed, details of the donor and donee, description of the gifted property, a statement that the gift is made voluntarily without consideration, an acceptance clause by the donee, and signatures of both parties and two witnesses.

Is stamp duty applicable on gift deed?

Yes, stamp duty is applicable on a gift deed. The stamp duty amount depends on the market value of the property and state-specific laws. Many states offer concessional stamp duty rates when the gift is made to blood relatives.

Who prepares a gift deed?

A gift deed is usually prepared by a lawyer, legal expert, or a professional legal service provider. It can also be drafted using standard formats, but legal assistance is recommended to ensure compliance with applicable laws and avoid future disputes.

What is better, gift deed or will?

A gift deed is better when immediate transfer of ownership is required, as it takes effect during the donor’s lifetime and reduces future disputes. A will is better when the owner wants to retain control over the property during their lifetime and transfer it only after death.