What Are The Advantages of Gift Deed Registration ?

 In addition to being a statutory document, a gift deed is a document that makes clear to the beneficiary exactly what asset has been transferred from the donor to them in the form of a gift. The donor and the donee execute a gift deed, which is a document that is signed by both of them. Although it is not mandatory in order to implement a gift deed in order to transfer the property, it does act as a valid document when it comes to documenting the transfer. You can use the gift deed to transfer a movable or immovable property by using both sides of the deed with the same intent. An absolute ownership declaration acts as the legal basis for stating that a gift item has been given to the donee as a gift.


Advantages of Gift Deed Registration:

Several benefits can be gained from executing a gift deed, and the six most significant are as follows:-

Gifting should be legalized:

In order to make the process of gifting legal, you need to execute a gift deed. Gift deeds generally contain comprehensive details regarding the property, the parties involved, and the terms of the agreement, so that there can be no disputes that may arise in the future as a result of the agreement.

Serve as a legal proof:

As a gift deed acts as the sole proof that an asset has been transferred from one party to another, the parties involved are less likely to be forced to confront any legal disputes in the future. The language basically gives the parties the right to use the legal right to opt for the court proceeding if there is a legal dispute between the parties. 

Exemption from taxation:

It is also important to note that the biggest advantage of a Gift deed is that it will not attract any taxes to a certain extent. In the case of gifts recovered by the donee in a given year, the tax authority shall not impose any tax on the gift recovered by the donee if the total value of the gift falls below the threshold limits, i.e. of Rs 50,000 in a given year. A person may also give any property (movable or immovable) to a relative, usually for a consideration of the heirs or a big blessings, without having to worry about income tax.

Revocation freedom:

In the event that the gift deed owner wished to cancel it with effect immediately, he could do so. It states under Section 126 of the Transfer of Property Act, 1982 [1] that parties to a conveyance can revoke the deed at any time if the clause for such a revocation is contained in the deed. Additionally, you may also choose to have the gift deed be irrevocable in nature, which is possibly the most enticing feature of all.

Maintain Absolute Ownership:

If the owner transfers the property to the concerned relatives through a gift deed, then the property becomes the absolute property of the donee as soon as the gift deed is signed by the owner.

Property transfer within a short timeframe:

If you wish to transfer the property to the new owner on an immediate basis, then a gift deed can be the best option for you in that case. The gift deed differs from a will, which involves the transfer of property after the death of the owner, in that the transfer cannot be completed without the consent of the donor and recipient.

Essentials of a Gift Deed :

  • As a legal declaration, a gift deed must be stated as clearly and unambiguously as possible, so that the details are clear to all parties involved.

  • There must be a clear indication as to the relationship between the parties in cases of transaction between families.

  • There will be a date and place for the execution of the gift deed.

  • It is a requirement that two witnesses and the signatures of all parties involved appear on the Gift Deed.

  • As a general rule, a gift deed is executed voluntarily, and it doesn't involve any financial transaction in the process. 

  • As the name implies, a gift deed can only be used on property that already exists, whether it is immovable or movable.

  • As part of the legal validation of the gift deed, it is essential that the donee accepts the gift.

  • Legally speaking, a transfer of property will not be considered valid from the perspective of the law until it is registered with the government.

  • A stamp duty is charged as part of the registration process which is paid through the non-judicial stamp paper that is used for the registration process.

  • Depending on the market value of the property, the stamp duty will fluctuate accordingly.

  • In order to challenge a gift deed in court, a law pertaining to the law of limitations may be used to establish the legality of the gift deed.

  • It is possible for the owner of a piece of immovable property to give it to a relative or to a third party. The validity of a gift depends entirely on whether it has been made voluntarily and without any interest in return for it.

  • It is equally as important to note that the gift deed becomes effective right away, just as a sale deed does. 

The Important Points About Gift Deed Registration:

  • During the lifetime of a person, gifts can be used in order for them to transfer property, and this property could be either movable or immovable.

  • There is no irrevocability in the nature of gifts deeds that are unregistered.

  • Before executing any gift deed, you should make sure that you check the state-by-state tax liabilities before taking any action.

  • Gift deeds do not attract any taxes if the donee is deemed to be a family member of the donor. To make sure the transfer is legal, the applicant still has to pay the stamp duty and registration charges as a prerequisite.

  • In order to record an assignment of a gift, you need to execute a deed by which the property has been transferred to the donee. Due to the complete details of the property and the details of the parties involved in the transaction, this document will serve as a legal proof that the title to the property has been assigned.  

  • A Gift Deed is an important piece of evidence in the event that a future dispute arises between parties as a result of a Gift Deed.

  • In the event that there is a contradiction that may arise in the future, a Gift Deed serves as a statutory protection for all parties concerned.

  • As a result of the agreement, the entire transaction becomes legally binding.

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