What’s a gift deed?
A gift deed is a doc that formally data the switch of an asset (like jewelry, a automobile, and even land) from you (the donor) to the recipient (the donee).It serves as concrete proof of your beneficiant intentions and prevents potential misunderstandings down the road.
Why use a gift deed?
While not necessary for all presents, a gift deed provides a number of benefits:
Clarity and safety: The doc removes any uncertainty in regards to the switch by clearly stating the gift particulars and the recipient’s acceptance, minimising the possibility of future household disagreements.
Legally binding: For land or buildings, a gift deed is obligatory for authorized recognition. Registration below the Transfer of Property Act is required, together with paying stamp responsibility primarily based on the property’s worth.
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Making a gift deed
When making a gift deed, it is essential to replicate the donor’s voluntary intent and monetary stability. This ensures that the gift is given freely, with none stress or coercion.
Accepting the gift deed
Once the gift deed is ready, the recipient’s acceptance must be recorded by their signature on the doc. It is essential that this acceptance takes place whereas the donor is alive to make the gift legitimate.
Registering the deed
For immovable property, registration below the Transfer of Property Act is obligatory. Paying the suitable stamp responsibility, primarily based on the property’s worth, is important to legalise the switch.
Gift deeds: Key points to recollect
Once gifted, it is completed: Generally, presents can’t be revoked after they’re given. The deed solidifies this finality.
Tax implications: Gifts between shut family, as outlined by the Income Tax Act, 1961, could also be exempt from taxes for the recipient. However, it is all the time advisable to seek the advice of a tax advisor for particular steerage.
With inputs from Centre for Investment Education and Learning content material which appeared in Economic Times
