Stamp duty is payable on a gift deed, and differs across states
2 min read . Updated: 10 Aug 2015, 09:37 PM IST
PremiumA gift to a minor donee is valid if the guardian, on behalf of the minor, accepts it
I own a property in Maharashtra and want to transfer it as a gift either to my wife or minor daughters. How much stamp duty I have to pay for transfer of property to a trust where the registered beneficiaries are my wife and daughters?
—Mayur Shah
Gift of immovable property has to be in accordance with section 122 of Transfer of Property Act, 1882. A gift is considered valid only when (i) it’s made voluntarily; (ii) it is without consideration; (iii) there has been an offer by the donor (person making the gift); and (iv) the offer has been accepted by the donee (person receiving the gift). So, for the gift to be valid, you must transfer the property voluntarily, without consideration, and it must be accepted by your wife or daughters during your lifetime while you are capable of giving. The transfer must be effected by a registered and stamped instrument signed by you or on your behalf and attested by at least two witnesses. A gift to a donee who is a minor is valid if the guardian, on behalf of the minor, accepts it. As held in K. Balakrsihnan v. K. Kamalam (AIR 2004 SC 1257), if the donor is gifting property to his own minor child, acceptance can be presumed to have been made by him without any overt act signifying acceptance by the minor.
Stamp duty is payable on a gift deed, and differs across states. In Maharashtra, payment of stamp duty is governed by Maharashtra Stamp Act, 1958 (Stamp Act). The stamp duty leviable on a gift deed for an immovable property, is same as payable on conveyance of immovable property. Stamp duty is calculated on the basis of the property’s market value.
If the gift is made to a family member—husband, wife, brother or sister of the donor or any lineal ascendant or descendant of the donor—duty chargeable shall be at the same rate as specified above, or 2% of property’s market value, whichever is less.
Further, vide the Maharashtra Stamp (Amendment) Act, 2015, which came into effect from 24 April 2015, it has been provided that if residential and agricultural property is gifted to a husband, wife, son, daughter, grandson, grand-daughter or wife of deceased son, duty chargeable shall be 200 only.
As per section 17 of the Registration Act 1908, it is mandatory to register a gift deed of a immovable property with the sub-registrar of assurances within whose sub-district the whole or some portion of the property is situated, within four months of execution. Else, transfer will be held invalid. Applicable registration charges will be payable. If you want to transfer the property to a trust where registered beneficiary will be your wife and daughters, stamp duty will depend upon whether there is disposition of property. If there is disposition, which will happen in this case, stamp duty will be same as paid on a conveyance of immovable property, for a sum equal to the amount settled or the property’s market value. The instrument of transfer to the trust will also have to be registered as set out above.
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