Dr.

Ram Manohar Lohiya National Law University Lucknow

2017- 2018

Final Draft On

“Gift Deed”

Submitted to: Submitted by:

Dr. Shakuntla Margaret Rose

Assistant Professor (Law) Section- A

RMLNLU Enrollment

Number- 150101078

Semester – VIth

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 ACKNOWLEDGMENT

Firstly, I would like to thank respected Dr. Shakuntla for giving me such a golden opportunity
to show my skills and capability through this project. This project is the result of the extensive
ultrapure study, hard work and labour, put into to make it worth reading. It is my pleasure to be
indebted to various people, who directly or indirectly contributed in the development of this
work and who influenced my thinking, behaviour, and acts during the course of study. Lastly, I
would like to thank the almighty and my parents for their moral support and my friends with
whom I shared my day-to-day experience and received lots of suggestions that
improved my quality of work.

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 TABLE OF CONTENTS
Acknowledgements ...................................................................................................................... 2
Introduction ...................................................................................................................................4
CHAPTER 1: GIFT .......................................................................................................................6
CHAPTER 2: GIFT DEED .......................................................................................................... 7
When a Gift Deed is made ............................................................................................................ 7
Contents of Gift Deed ................................................................................................................... 8
Charges for a Gift Deed ................................................................................................................ 8
Revocation of Gift Deed ............................................................................................................... 8
Points to be considered while drafting a Gift Deed ...................................................................... 9
Steps in gifting process ................................................................................................................ 10
Facts of Gift Deed to be drafted ................................................................................................... 11
CHAPTER 3: DRAFT GIFT DEED ........................................................................................... 11
References .................................................................................................................................... 14

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 INTRODUCTION

Gift is a Transfer of Property and is defined in Section 122 of the Transfer of Property Act, 1882.
It is a unique transfer of property in the sense that it involves no consideration. The basic essence
of a gift is the complete absence of consideration.1 The law of gifts in India is governed by
Sections 122 to 129 of the Transfer of Property Act, 1882. The right to gift away ones property
whether movable or immovable is an important right and an important element of property law.
Although a gift involves no consideration in the legal sense it involves the consideration of love,
affection, spiritual and religious benefit etc. whose importance cannot be overlooked. Thus the
law relating to gifts has a humane element in it and as such the law of gifts should be clear and
unambiguous without any scope for misuse and controversy. This objective might be idealist but
ultimately the law relating to gifts should always strive to protect the interests of the donee,
donor and the property involved in the greater interests of justice. 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. A gift deed is a legal document that
records and details transfer of movable or immovable property from the donor (giver) to the
donee (receiver) without any exchange of money. The “gift” must be a well defined movable or
immovable property and be transferable. The deed should be based on the consideration of
natural love and affection of the Donor to the Donee. The donor in the gift deed must be solvent
and should not use this arrangement for illegal gains or tax evasion. Transfer of property,
specially an immovable one, needs to be documented in accordance with the Transfer of
Property Act, 1882 in India and must fulfill the conditions laid out. Registration of the gift deed
for an immovable property is mandatory and must be done with the Sub-Registrar in the area
where the property is situated.

1
Shakuntala v. State of Haryana (1979)3 SCC 226

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 CHAPTERISATION
CHAPTER 1: GIFT
"Gift" is the transfer of certain existing moveable or immoveable property made voluntarily and
without consideration, by one person, called the donor, to another, called the donee, and accepted
by or on behalf of the donee. Such acceptance must be made during the lifetime of the donor and
while he is still capable of giving. If the donee dies before acceptance, the gift is void. The
conception of the term "gift" as used in the Transfer of Property Act is somewhat different from
the use in Mohammedan law. In the Mohammedan law a gift is a transfer of property or right by
one person to another in accordance with the provisions given in the Mohammedan law and
includes-
a. A hiba, an immediate and unconditional transfer of the ownership of some property or of some
right, without any consideration or with some return (ewaz); and

b. An ariat, the grant of some limited interest in respect of the use or usufruct of some property
or right.

Where a gift of any property or right is made without consideration with the object of acquiring
religious merit, it is called sadaqah. The terms "hiba" and "gift" are often indiscriminately used
but the terms "hiba" is only one of the kinds of transactions which are covered by the general
term "gift". A hiba is a transfer without consideration. A gift by a Muslim in favour of his co-
religionist must be under the Mohammedan Law. A gift is not a contract (though in Muslim law
it is called a contract) but the principle may be applicable even to gift. In ordinary legal effect,
there cannot be a `gift' without a giving or taking. The giving or taking are two
contemporaneous, reciprocal acts, which constitute a gift. Section 122 of the Act postulates that a
gift is a transfer of certain existing movable or immovable property made voluntary and without
consideration by one person called the donor, to another, called a donee and accepted by or on
behalf of the donee. The essential elements of a gift are:
a. The absence of consideration;

b. The donor;

c. The done

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d. The subject-matter;

e. The transfer; and the acceptance.

The concept of gift is diametrically opposed to any presence of consideration or compensation.

In order to constitute a valid gift, the pivotal requirement is acceptance thereof. No particular
mode of acceptance is required and the circumstances throw light on that aspect. A transaction of
gift in order to be complete must be accepted by the donee during the lifetime of the donor.
Factum of acceptance can be established by different circumstances such as donee taking a
property or being in possession of deed of gift alone. If a document of gift after its execution or
registration in favour of donee is handed over to him by the donor whom he accepts, it amounts
to a valid acceptance of gift in law. The specific recital in the deed that possession is given raises
a presumption of acceptance.
CHAPTER 2: GIFT DEED
Under section 122 of the Transfer of Property Act, 1882, one can transfer immovable property
through a gift deed. Like a sale deed, a gift deed contains details of the property, the transferor
and recipient. But instead of a sale consideration in a sale deed, a gift deed allows one to transfer
ownership without any exchange of money. Registering a gift deed with the sub-registrar is
mandatory as per section 17 of the Registration Act, 1908, and as per section 123 of the Transfer
of Property Act. If one dont do this, the transfer will be invalid. Besides that, once a gift deed is
registered in the name of the recipient, only then one can apply for mutation of the property.
Mutation is necessary to transfer utility connections in the name of the recipient. Also, for the
recipient to be able to further transfer the property, a registered gift deed will be required.
When a Gift Deed is made
A Gift deed can be made in the following circumstances:
1. At the time of transferring the rights of property as a gift.

2. When there is no exchange of money involved.

3. To provide a legal representation to the gift being transferred

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Contents of Gift Deed
A gift deed should contain following details:
1. Details of the donor and done.

2. Relationship details of the donor with the donee.

3. Rights & power and authority of the Donor.

4. Description and details of the property to be gifted.

5. Confirmation clause on delivery of possession.

Charges for a Gift Deed

Stamp duty and registration fee has to be paid to register a gift deed. In some states, stamp duty
rates for property transfer by way of gift are the same as for sale or conveyance deed. However,
rules vary across states; certain state governments even offer some concession if the property is
being gifted to blood relatives.
Revocation of Gift Deed Section 126 of the Transfer of Property provides for conditions where a
gift may be revoked. The following are those conditions-
1. That the donor and donee must have agreed that the gift shall be suspended or revoked on the
happening of a specified event;

2. Such event must be one which does not depend upon the donor's will;

3. The donor and donee must have agreed to the condition at the time of accepting the gift; and

4. The condition should not be illegal or immoral and should not be repugnant to the estate
created under the gift. Section 126 is controlled by Section 10. As such, a clause in the gift deed
totally prohibiting alienation is void in view of the provisions contained in Section 10. A gift,
which was not based on fraud, undue influence or misrepresentation nor was an onerous one,
cannot be cancelled unilaterally. Such a gift deed can be cancelled only by resorting to legal
remedy in a competent court of law.

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Points 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

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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.
Steps in gifting process
Gifting process can be subdivided into three parts as described below:
1. Drafting the Gift Deed – A gift deed is drafted with the help of a lawyer and it describes what
is being transferred and to whom. Gift Deed is a contract between donor and the donee which
defines simultaneous and reciprocal act of giving and taking. A gift to be valid must be made by
a person voluntarily and not under compulsion without any exchange of money.

2. Acceptance – Acceptance of the gift after its execution is a legal requirement and Donee must
accept the gift during the lifetime of donor. In case donee fails to accept the gift, it is rendered
invalid. The acceptance may be validated by acts such as taking possession of the property.

3. Registration – As per Section 123 of the Transfer of Property Act, a gift of immovable
property cannot pass any title to the donee unless it is registered. Attestation by two witnesses is
required during registration and post registration, title transfer is possible.

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Facts of Gift Deed to be drafted
Brief facts of gift deed are as follows:
1. Details of donor: Shri Mahendra Kumar Gupta, aged 63, years, S/o, Late Shri P.C. Gupta,
Residing at 119, Chandela Vihar, Bilaspur

2. Details of donee: Shri Kunal Gupta, aged 35 years S/o Shri Mahendra Kumar Gupta Residing
at 119, Chandela Vihar, Bilaspur

3. Details of gift: Kothi No. 65, Ring Road, Bilaspur situated approximately on 2 acres of land

4. Reason for Gift: The gift has been made as the donor has immense love and affection for the
donee as donee is his most beloved son.

CHAPTER 3: DRAFT GIFT DEED

GIFT DEED THIS DEED OF GIFT is made at Bilaspur this 15th day of February 2016 between
Mr. Mahendra Kumar Gupta, aged 63, years, S/o, Late Mr. P.C. Gupta, Residing at 119,
Chandela Vihar, Bilaspur hereinafter referred to as „the Donor‟ of the One Part and Mr. Kunal
Gupta, aged 35 years S/o Mr. Mahendra Kumar Gupta Residing at 119, Chandela Vihar, Bilaspur
hereinafter referred to as „the DONEE‟, of the Other Part. WHEREAS the Donor is seized and
possessed of the land and premises situate at Kothi No. 65, Ring Road, Bilaspur situated
approximately on 2 acres of land and more particularly described in the Schedule hereunder
written. AND WHEREAS the DONEE is related to the Donor as his Son. AND WHEREAS the
Donor desires to grant the said property to the DONEE as gift in consideration of natural love
and affection as hereinafter mentioned „ AND WHEREAS the DONEE has agreed to accept the
gift as is evidenced by his executing these presents. AND WHEREAS the market value of the
said property is estimated to be Rs. Eighty Five Lacs Only.
NOW THIS DEED WITNESSETH that the Donor without any monetary consideration and in
consideration of natural love and affection, which the Donor bears to the DONEE, doth hereby
grant and transfer by way of gift the said property situate at Kothi No. 65, Ring Road, Bilaspur
and more particularly described in the Schedule hereunder written together with all and singular
the building, and structures, thereon and all the things permanently attached thereto or standing

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thereon and all the liberties, privileges casements and advantages appurtenant thereto And all the
estate, right, title, interest use, Inheritance, possession, benefit, claims and demand whatsoever of
the Donor To Have And To Hold the same unto and to the use of the DONEE absolutely but
subject to the payment of all taxes, rates, assessments, dues and duties now and hereafter
chargeable thereon to the Government or Municipality or other Local Authority.

AND he the Donor doth hereby covenants with the DONEE; (a) That the Donor now has in
himself, good right, full power and absolute authority to grant the said property hereby granted
as gift in the manner aforesaid. (b) The DONEE may at all times hereafter peaceably and quietly
enter upon have occupy. possess and enjoy the said piece of property and receive the rents,
Issues, and profits and rents thereof and every part thereof to and for his own use and benefit
without any suit, lawful eviction, interruption, claim or demand whatsoever from or by the
Donor or his heirs, executors, administrators and assigns or any person or persons lawfully
claiming or to claim by, from, under or in trust for the Donor. (c) That the said property is free
and clear and freely and clearly and absolutely and forever released and discharged or otherwise
by the Donor and well and sufficiently saved, kept harmless and Indemnified of and from and
against all former and other estate, titles, charges and encumbrances whatsoever, had made,
executed, occasioned or suffered by the Donor or by any other person or persons lawfully
claiming or to claim by, from, under or in trust for the Donor. (d) AND FURTHER that the
Donor and all persons having or lawfully claiming any estate or Interest whatsoever to the said
land and premises or any part thereof from under or in trust for the Donor or his heirs, executors.
administrators and assigns or any of them shall and will from time to time and at all times
hereafter at the request and cost of the DONEE do and execute or cause to be done and executed
all such further and other acts, deeds, things, conveyances and assurances in law whatsoever for
better and more perfectly assuring the said land and premises and every part thereof unto and to
the use of the DONEE in the manner aforesaid as by the DONEE, his heirs, executors,
administrators and assigns or counsel in law shall be reasonably required. IN WITNESS
WHEREOF the Donor as well as the DONEE (by way of acceptance of the said gift) have put
their respective hands the day and year first hereinabove written.

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THE SCHEDULE ABOVE REFERRED TO

Signed and Delivered by the within named Donor Mr. Mahendra Kumar Gupta

in the presence of …….

Signed by within named DONEE Mr. Kunal Gupta In the presence of …….

WITNESSES:

1. ------------------------

2. ------------------------

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REFERENCES
Acts/Statutes
1. Registration Act, 1908

2. Transfer of Property Act, 1882

Books
1. ODGERN’S ON DRAFTING AND PLEADING, 3rd EDITION (2008) UNIVERSAL
PUBLICATION, NEW DELHI

Websites
1. http://articles.economictimes.indiatimes.com/2009-06-07/news/27647546_1_gift-deed-gifted-
property-donee last visited on 13th Feburary 2018

2. http://www.legalserviceindia.com/articles/transfer.htm last visited on 13th February 2018

3. http://legalsutra.com/837/gifts-under-transfer-of-property-act/ last visited on 13th February

2018

4. http://www.livemint.com/Money/PYvt8NpP8AXnea8nKAn9FI/For-a-transfer-of-property-
through-gift-deed-to-be-valid-it.html last visited on 13th February 2018

5. http://taxguru.in/income-tax/faq-performa-gift-deed-list-relatives-gift-received-tax-
liability.html last visited on 13th February 2018

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