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My mother wants to gift an immovable property located in Rajkot, Gujarat, to me. What are the stamp duty registration charges applicable in Gujarat for this gift deed? I have a sister who creates problems in the family. My mother has already written a registered will in favour of me. Will I be required to pay full stamp duty? Can the gift deed be made on a stamp paper of 100.

—Mehul A. Gandhi

While answering this query, we are assuming that the property that your mother wants to gift to you is not ancestral property. We are further assuming that your mother is a Hindu and is governed by the provisions of the Hindu Succession Act, 1956.

The stamp duty payable in Gujarat is governed by the Bombay Stamp Act, 1958 as applicable to the State of Gujarat. As per Article 28 of Schedule I of the said Act, the stamp duty payable on a gift deed is 3.5% of the market value of the property being gifted. As per the provisions of the said Act, you can’t execute a gift deed on a stamp paper of 100. The bequest made to you in your mother’s will, will only take effect after her demise and has no bearing upon the amount of stamp duty payable if your mother decides to make a gift of the property to you during her lifetime.

Section 17 of the Registration Act, 1908 lays down the documents of which registration is compulsory. Section 49 of the Registration Act, 1908, inter alia states that no document required by section 17 or by any provision of the Transfer of Property Act, 1882, to be registered shall affect any immovable property comprised therein unless it has been registered. A gift deed is a compulsorily registerable document as per the provisions of the Registration Act, 1908 and thus the same will be required to be registered with the applicable Sub Registrar of Assurances in Gujarat. The registration charges payable on a gift deed differs from state to state. In certain states, it is a percentage with a cap and in other states it is an ad valorum amount with no cap. It would be advisable for you to check with a local lawyer in Gujarat as to what the registration fee would be on the gift deed.

As per section 122 of the Transfer of Property Act, 1882, a gift is considered to be valid only when it is made voluntarily; it is without consideration; there has been an offer by the donor; and the offer has been accepted by the donee, and the donee actually accepts the gift. Thus for the gift to be valid it must be made by your mother voluntarily, without any exchange of money and it needs to be accepted by you.

A gift deed must be executed by the donor and the donee—by you and your mother. Further, the gift deed must be attested by two attesting witnesses. Stamp duty must be paid on the gift deed and the same must be registered.

If your mother does not execute the gift deed during her lifetime, she shall continue to be the owner of the said immovable property. Your mother’s will shall only become operative after her death. Though it is not compulsory for a Hindu to obtain a probate of a will when the property is situated in Gujarat, it would be advisable for you to obtain a probate of your mother’s will, especially as you feel that your sister may contest the bequest. To obtain a probate, you will have to file a probate petition in a court of competent jurisdiction. The court fees will be payable at the time of filing a probate petition and if uncontested, it normally takes around 8-10 months to obtain a probate. However, if your sister challenges your mother’s will (which can be done by filing a caveat in the probate petition filed by you), your probate petition will be converted into a testamentary suit and will have to be defended by you as any other suit.

Queries and views at mintmoney@livemint.com

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