Gift of Property

The Transfer of Property Act, 1882 pertain to gift of both immovable and movable property in India. The Act defines 'gift' as "the transfer of certain existing movable or immovable 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."

Gift is a willful relinquishing of rights over an immovable property and transferring the same to some other person, usually a near and dear one. The "person" within the meaning of law would mean a living person or artificial person. Gift can be either be a contribution or a donation. The act of gifting a property is complete only when the receiver accepts it.

Manner of transfer of Immovable Property by way of Gift:
Section 123 of the Transfer of Property Act, 1882 specifies how an immovable property should be transferred by way of gift. A transaction of gift can be done:

• By a registered instrument
• Be signed by or on behalf of the donor
• Be attested by at least two witnesses

The properties that can be gifted away are:

• A man's property can be gifted to inheritors
• A female can gift her dowry with the consent of her husband
• A widow can gift a share of her property without making a will
• A resident of India can gift his movable/immovable property to a non-resident Indian. However, a gift by an NRI is taxable.

Conditions for 'gift'

A transfer of property by way of gift is subject to fulfillment of few conditions that entail:

1. The donor on his own consent wants to gift a part or all of his property to a living person without anything in return.
2. The donee accepts the gift voluntarily during the lifetime of the donor.
3. There is no element of consideration, that is, no money or reward/ promise of reward attached with its execution.
4. A complete transfer of title, deed occurs when the property is transferred from the donor to the donee.
5. The donee is named as an attorney in the POA (Power of Attorney).
6. The donor however reserves the right to use and enjoy the profits and advantages of his property unless it is damaged or altered in any way.
7. Consent of the donor/donee under coercion, fraud, undue influence, misunderstanding or mistake makes the transaction vitiated. Also, a 'gift' becomes void if the donee dies before the gift is accepted. When there happens to be more than one donee, it becomes void against the donee who does not accept the gift.

Definitions

1. Donor: A donor is a person or a company or a foundation that makes a gift of property. He is also called a "grantor".
2. Donee: A donee is the recipient of a gift. It can be an individual or charitable organization. He is also called "grantee" or "beneficiary".
3. Subject Matter:The property constituting a gift can be an existing property - residential flat, plot of land, bungalows and agricultural land or holdings without any monetary consideration.
4. Absence of Consideration:The gift transfer must be absolute and UN- conditional with the transfer of title, deed et al.

Facts you should know while gifting property:

1. A gift to an unborn person is not permitted under the property laws of India.
2. To gift a movable property, it is mandatory to accompany the transfer by a written document signed by donor and donee.
3. To gift an immovable property, it is mandatory to register the transfer through a registered gift deed to make it legitimate under Indian Registration Act, 1908.

When a gift of an immovable property is made, a 'gift deed' needs to be made by a lawyer. You can seek legal advice from the expert panel of advocates aboard our team on the legalities involved in gifting a property.