Registration must while gifting property - Some conditions to make a valid gift of property

A gift of property may be made within the family by a father to his son, daughter, wife or brother. It can also be made by a mother to her son or daughter and from grandparents to their grandchildren. The gift should be made through a registered document signed by the donor or on behalf of the donor, attested by at least two witnesses. An authorised representative of the donor may also make a gift. The authorisation, i.e., the power of attorney (POA) given to the representative, should be clear about the provision for making a gift. The power of attorney should be properly stamped as per the applicable laws.

A gift has to be made in writing and needs to be registered. A proper gift deed needs to be executed between the donor and the donee. The Transfer of Property Act stipulates that the acceptance has to be made during the lifetime of the donor and when the donor still capable of giving a gift. As the gift deed needs to be registered, the acceptance of the gift is usually recorded on the gift deed itself.

In certain circumstances, a gift can be suspended or revoked. It depends on the contents and conditions of the gift deed. Both the donor and donee must agree to such conditions.

A gift may be cancelled or rescinded on these grounds:

• On occurrence of any event which is specified in the gift deed
• Both the parties should have accepted the conditions and the donee should have agreed to such conditions while accepting the gift
• The proposed event, which suspends or revokes the gift, should be beyond the control and will of the donor
• The condition should not be illegal or immoral There should be absence of any kind of consideration.

Although there is no consideration received against a gift, it attracts stamp duty and registration changes as applicable to a sale deed. However, there is some concession for a gift to family members (spouse, son, daughter, daughter-in-law and grandchildren). The maximum stamp duty is Rs 1,000 and an additional cess of Rs 50 plus infrastructure cess. The registration fee is Rs 500 in such cases.

A document of gift of property is compulsorily registrable. A gift is given on consideration of affection, and no monetary consideration is involved. So, any gift deed irrespective of the value of the property gifted needs registration.

Sometimes, a gift is made to two or more persons and any one of them may not accept the gift. For example, a gift may be made by a father to his son and daughter, and the daughter may refuse to accept the gift. In such a case, where one of the donee does not accept the gift, the gift is not invalid completely. The gift becomes inoperative and void for the donee who does not accept it. The other donee who accepts the gift is entitled to what is gifted to him only. One donee will not have any rights, interests, or title to the property which was not accepted by another donee. Only the portion gifted to a donee belongs to him and the unaccepted portion reverts to the donor.