Gift Deed of Property In India-What Should You Know?

In India, a gift deed is a legal document used to transfer property ownership from one person to another without any exchange of money. Here's all you need to know about gift deeds of property:

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What is a Gift Deed?

A gift deed is a legal document representing the transfer of property ownership from the donor to the recipient. Here, the donor is the property owner, and the recipient is the recipient of the same.  The deed needs to be executed on non-judicial stamp paper. The donor signs the paper. The lawyers register the deed with the sub-registrar of assurances in the jurisdiction to which the property lawyers in Kolkata belongs.

Registration Process:

To register a gift deed, the donor and recipient must be present at the sub-registrar's office. The presence of two witnesses is also mandatory to complete the process. The registrar views and checks the document. He proceeds if everything is in order! The parties can complete the registration process if everything is fine. After this, the recipient becomes the legal owner of the property.

Tax Implications:

For the donor: There are no tax implications for the donor when gifting a property to a close relative. The registrar follows the process defined under the Income Tax Act.

For the recipient: The recipient may be liable to pay income tax. He or she needs to pay tax because the value of the gifted property exceeds certain limits.

Critical Components of a Gift Deed:

• Details of the donor and recipient

• Description of the gifted property

• Details of the consideration (usually love and affection)

• Conditions, if any, attached to the gift

• Signatures of the donor and two witnesses

Benefits of a Gift Deed:

• Avoidance of succession laws: By gifting a property, the donor can avoid the complexities of succession laws, ensuring that the property passes directly to the intended recipient.

• Tax benefits: Gifting a property to a close relative can help in tax planning and reduce tax liabilities.

Legal Validity:

A gift deed is a binding document, and once registered, it cannot be revoked unless specific conditions are mentioned in the deed that allow for revocation.

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The Bottom Line:

A gift deed is a valuable tool for transferring property ownership in India. Still, it's essential to understand the legal implications and seek professional advice to ensure a smooth transfer process.

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