BackTransfer is based on the nature of property to be gifted
A gift is a transfer of property without consideration or compensation and allows one to transfer his or her assets or ownership to another without any exchange of money or other assets
Premium
What is a gift according to law? Can anyone distribute property by gifting it? If so, how can one go about doing it?
—Kavish Singh
According to Section 122 of Transfer of Property Act, 1882 (TOPA), a “gift" is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor (the person making the gift), to another, called the donee (the person receiving the gift), and accepted by or on behalf of the donee. The acceptance should take place during the lifetime of the donor.
A “gift" is, therefore, a transfer of property without consideration or compensation and allows one to transfer his or her assets or ownership to another without any exchange of money or other assets. In determining the validity of a gift, the principles laid down in the Indian Contract Act 1872, relating to free consent and the donor’s competence to contract (which inter alia would mean that the donor is not a minor and is of sound mind) would apply. It may be pertinent to note that although it is imperative for the donor to be competent to contract, a donee need not be competent to contract and a gift may be accepted by, or on behalf of such a person who is not competent to contract (e.g a minor).
Under TOPA, it is also essential that the subject matter of the gift be certain existing movable or immovable property (i.e., tangible property like land, goods, or actionable claims). The manner in which a gift is to be effected would depend upon the nature of the property to be transferred.
According to Section 123 of TOPA, (i) for the purpose of making a gift of movable property, the transfer may be effected either by a registered instrument signed and attested by at least two witnesses or by delivery and (ii) for the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.
Stamp duty would have to be paid on the registered instrument (gift deed) prior to its execution, as per the relevant laws of the state where the property is situated and where the gift deed is executed. In some states, the stamp duty is lower in the case of gift to a close relative.
Also, the gift deed would need to be registered within a period of four months from the date of execution as per the applicable provisions of the Registration Act, 1908, with the applicable sub-registrar of assurances. Depending upon the state in which the immovable property is situated, applicable registration charges have to be paid at the time of registering the gift deed. But as indicated above, if the a gift is of moveable property, then it can be effected by delivery of the properties gifted (in which event no document has to be executed).
While responding to the query, I have assumed that the donor is not governed by Mohammedan law, since separate provisions would apply then.
Queries and views at mintmoney@livemint.com
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
