Gift is considered valid only when it is made voluntarily
Registration is mandatory for gift of movable property when it is effected by a deed of gift
What happens if a gift deed is executed but not registered?
—S. Jain
A gift is the transfer of existing movable or immovable property by a donor (the person making the gift) to a donee (recipient) and accepted by or on behalf of the donee. The gift of movable or immovable property must be in accordance with section 122 of the Transfer of Property Act, 1882, (ToPA). Under this section, a gift is considered to be valid when, (i) it is made voluntarily; (ii) it is without consideration; (iii) there has been an offer by the donor; and (iv) the offer has been accepted by the donee during the lifetime of the donor and while he or she is still capable of giving.
Under section 123 of the ToPA, a gift of immovable property must be effected (1) by a registered instrument, (2) signed by or on behalf of the donor, and (3) attested by at least two witnesses. In case of movable property, the gift has to be effected either by a registered instrument signed as aforesaid, or by delivery in the same manner as goods sold under section 33 of the Sale of Goods Act, 1930. As per section 17 of the Registration Act, 1908, it is mandatory to register a gift deed relating to immovable property with the sub-registrar of assurances within whose sub-district the whole or portion of the property is situated, within a period of four months from the date of execution. Otherwise, the transfer will be held invalid.
However, gift of movable property can be effected either by delivery of movable property or by executing a gift deed signed by or on behalf of the donor and registered with the sub-registrar of assurances. Registration is mandatory in case of gift of movable property only when it is effected by a deed of gift signed by the donor.
Stamp duty shall be payable in accordance with the provisions of the Stamp Act applicable to the state where the property is situated. For example, if the property is in Mumbai, stamp duty as per article 34 of Schedule I of the Maharashtra Stamp Act, 1958, will be applicable. Also, in certain states (for instance, in Maharashtra), stamp duty depends on the relationship between the donor and the donee and the type of property (residential, commercial or agricultural). For example, (a) if a father is gifting residential immovable property to his daughter, stamp duty payable would be 200 (as per the 2015 amendment Act); (b) if a sister is gifting immovable property (residential or commercial) to her brother, or if a father is gifting commercial immovable property to his daughter, then stamp duty would be 2% of market value of the property, and (c) if an uncle is gifting immovable property to his nephew, the stamp duty would be the same as is paid on a conveyance of immovable property.
However, it is to be noted that section 129 of the ToPA exempts gifts covered by Mohammedan law from the requirements of section 123, which require only declaration, acceptance and delivery to be valid. Thus paving the way for Muslim oral gifts to be valid whether they are moveable or immovable property.
Hence, in light of the aforesaid, it can be said that in the case where a gift deed is executed in relation to the gift of either movable property or immovable property, but not registered, the gift would not be held valid even when such gift has been proved to have been made in good faith.
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First Published:18 May 2015, 05:47 PM IST
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