A gift is a common mode of transfer of property. It is the transfer of certain existing moveable or immoveable property by one person to another. The transfer should be made voluntarily and without consideration. The person transferring the property is called the donor. The person to whom the property is transferred is referred to as the donee. The donee must accept the property during the lifetime of the donor and while he is still capable of giving. In case the donee dies before acceptance, the gift is void. The gift can be effected through a gift deed.
Here are some points that need to be considered while drafting a gift deed:

To make a valid gift of property

The donor is the person who gives. Any person who is competent to contract can make a gift of his property. A minor, being incompetent to contract is incompetent to transfer. A gift by a minor is void.

However, a minor can accept gifts. A natural guardian can accept a gift on behalf of a minor with the condition that the person nominated in the gift deed will act as a manager of the gifted property. Such acceptance would amount to recognition by the natural guardian of the nominated person as the manager or the agent of the minor for the purpose of the property.

For a valid acceptance

The donee is the person who accepts the gift. A minor may be a donee. But if the gift is onerous, the obligation cannot be enforced against him while he is a minor. But when he attains adulthood he must either accept the burden or return the gift. A gift may be accepted by or on behalf of a donee.

A donee may also be a person who is unable to express acceptance. A gift can be made to a child and could be accepted on the child's behalf. The donee must be an ascertainable person.

Process of gifting

A gift involves the process of giving and taking which are two simultaneous and reciprocal acts. There must be acceptance of a gift as well. There is no particular mode of acceptance. It may be express or implied. Further, the property must be accepted by the donee during the lifetime of the donor. The fact of acceptance can be established by different circumstances such as donee taking the property or being in possession of the deed of gift. If a document of gift, after its execution or registration in favour of a donee is handed over to him by the donor, it amounts to a valid acceptance of the gift.

Competence to contract is an important qualification required for making a gift. A gift to be valid must be made by a person with his free consent and not under compulsion. However, a mere weakness of the intellect would not be sufficient to invalidate the gift.

The gift must be a certain existing movable or immovable property. It may be land, goods, or actionable claims, and must be transferable. There cannot be any gift of future property. A gift must be of tangible property. Only an existing and tangible property is capable of being gifted.

Absence of consideration must

A gift is a transfer without any element of consideration. Complete absence of monetary consideration is an important prerequisite. Where there is any equivalent of benefit measured in terms of money in respect of a gift, the transaction ceases to be a gift.

The transfer of property must be voluntary and made gratuitously. It must satisfactorily appear that the donor knew what he was doing and understood the contents of the instrument and its effect, and also that undue influence or pressure was not exercised upon clear intention to make a gift.

Acceptance

Even when a gift is made by a registered instrument, it has to be accepted by or on behalf of the donee to make it complete, failing which the gift will be void. The law requires acceptance of the gift after its execution, though the deed may not be registered. The acceptance may be signified by an overt act such as the actual taking of possession of the property, or such acts by the donee as would in law amount to taking possession of the property where the property is not capable of physical possession. Delivery of possession is an essential condition for the validity of the gift.

However, it is not necessary that in every case there should be a physical delivery of possession. Possession may be either actual or constructive. The donor should divest himself completely of all ownership and dominion over the gift.

Registration

A gift of immovable property can be made only by a registered instrument. A gift of immovable property, which is not registered, is bad in law and cannot pass any title to the donee. Documents should be stamped with appropriate non-judicial stamp, registered as required under the India Registration Act and attested by two witnesses. A mere delivery of possession without a written instrument cannot confer any title. A deed cannot be dispensed with even for a property of small value.

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.