Owning a house is more than a matter of pride... it is a wise financial investment. People build or buy multiple houses for their family as a safety net against unseen crises. Often, one hears about parents, siblings or spouses transferring property in each other's names. In India, it is possible to transfer a property in various ways. One could sell the property, transfer it as inheritance through his will, or transfer it through a gift deed.

Under Section 122 of the Transfer of Property Act (1882), it is possible to transfer immovable property through a gift deed. A gift deed allows a donor (property owner) to transfer property and its ownership to a donee (a friend or a relative, not necessarily blood relative) without any monetary exchange.

There are, however, some conditions that decide the validity of the gift deed:

• The property must be transferred voluntarily (without any pressure from any party) by the donor and must be accepted by the donee
• The gift deed is valid only during the lifetime of the donor
• A donor can only gift that property which he/she already owns; any property that he plans to acquire or will acquire in the future cannot be transferred

The gift deed also depends on some other factors.

Type of property

The procedure of transferring property through a gift deed will differ depending on whether the property in question is coparcenary or self-acquired.

Coparcenary property is the term given to undivided property acquired or inherited by the donor ancestrally under the Hindu Law of Succession and Inheritance. In case of coparcenary property, the donor needs to obtain prior consent from all other coparceners, i.e. other family members who also have an undivided share in that property. The gift deed of such a property will be valid only if all coparceners give their consent for the transfer.

A self-acquired property simply means a property/asset that one has bought with his own money. No third party consent is required to transfer this property.

However, if one co-owns a property and wishes to gift an undivided share of that property, the deed must clearly mention the percentage of that undivided share.

Creation of a gift deed

The gift deed, prepared by an attorney/lawyer, is a legal document that includes pertinent details relating to the property transfer:

• Date and place of the deed
• Donor's details (Name, Father's name, Date of Birth, Address)
• Donee's Details (Name, Father's name, Date of Birth, Address)
• The relationship between the donor and donee
• Details of the property gifted
• Details and signatures of the witnesses present

A minimum of two witnesses is required to validate the gift deed. But, sometimes this required number of witnesses may vary in different states.

The donee has to 'accept' the property. Oral or verbal acceptance is not considered valid. Generally, acceptance is validated by the act of possession (of the property).

Registration

According to Section 17 of the Registration Act of 1908 and Section 123 of Transfer of Property Act, it is mandatory to register a gift deed with the sub-registrar.

Stamp duty and registration fee have to be paid for the registration process. Generally, the rate of stamp duty payable on the gift deed is the same as that of sale or conveyance deed. Certain states offer some concession in the stamp duty if the property is being transferred within blood relatives.

Registration is also important for initiating the process of mutation (change of title in official government records). The donee would require this to transfer the utility connections of the property under his/her name.

In case the donee is a minor

Legally, a person can transfer his property through gift deed to any person, irrespective of whether the donee is a legal adult or not. If the donee is a minor, his natural guardian is responsible for managing the property until the donee reaches the legal age. After that, it is up to the donee to accept or refuse the gift deed.

Can a gift deed be revoked?

An important condition attached to the gift deed is that once the donor has gifted the property to the donee, he does not have the right to revoke it at a later stage or to demand monetary compensation for the same. However, if the donor wants, he may include certain clauses in the deed. Section 126 of The Transfer of Property Act lists certain situations where a gift deed may be revoked by the donor:

- There is a mutual consensus between the donor and the donee to revoke the deed

-The transfer was based on the donor's consent but the donee was unwilling to accept

But, these conditions need to be specifically mentioned in the deed.