Home / Money / Calculators /  Stamp duty and registration charges apply for gift deeds

I wish to distribute some immovable and movable property during my lifetime. Can I do so by way of a gift? Which documents would I need?

—A. Patel

You can distribute immovable and movable property as gift during your lifetime. A gift is the transfer of existing movable or immovable property by the donor to the donee and accepted by or on behalf of the donee. Onerous gifts are in the form of a single transfer to the same person of several things, of which some are burdened by an obligation and others are not. In such a case, the donee can’t take anything by gift unless she accepts all the gifts fully. These are some essential details:

Under Hindu Law: There must be an intention or declaration of the gift by the donor, and acceptance of the gift (either mental, verbal or corporeal) by the donee. In case of land, possession, however small the parcel may be, is important.

Under Mohammedan Law: The donor must be at least 18 years of age and of sound mind. He may dispose the whole of his property by gift in favour of any person, including a stranger. There must be a declaration of the gift by the donor and acceptance by the donee.

Movable property should be actually delivered. Immovable property, of which the donor is in possession, the donor should physically depart from the property and the donee must make a formal entry. The documents involved are:

Transfer of immovable property by way of gift must be effected by a registered and stamped instrument signed by the donor and attested by at least two witnesses. Transfer of movable property as gift can be effected either by a registered instrument signed as aforesaid or by delivery. Stamp duty and registration charges are payable on gift deeds, and differ across states. The amount of stamp duty depends on the relationship between the donor and the donee. For example, if a father is the donor, stamp duty would be 2% of the property’s market value. But if an uncle is gifting immovable property to his nephew and the property is situated in Maharashtra, the stamp duty would be the same as is paid on a conveyance of immovable property. It’s also important to keep tax implications in mind. Some details are given here, but please check with your chartered accountant or tax consultant. There is no gift tax in India. So, the donor is not liable to tax for any gifts made by him either in cash or in kind. But if any sum of money, whose aggregate value exceeds 50,000, is received without consideration by any individual or Hindu Undivided Family from any person after 1 April 2006, the whole of the aggregate value would be chargeable to income tax under “Income from other sources" in the hands of the recipient.

But there are certain exceptions. For example, gifts or any sum of money received without consideration would not be taxable as income if the same is received (a) from a relative (relative being defined for this purpose as a spouse of the individual; /brother/sister of the individual; brother/sister of the spouse of the individual; brother/sister of either of the parents of the individual; lineal ascendant or descendant of the individual; lineal ascendant or descendant of the spouse of the individual; spouse of any of the aforesaid persons); (b) under a will or by way of inheritance; (c) in contemplation of death of the payer.

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