Gift Deed - Importance - Format - Easy Steps to Follow

A Gift Deed is more than just a legal document—it's an expression of trust, care, and responsibility. It allows a person, called the donor, to give something of value—like land, a house, gold, or money—to another person, known as the recipient or donee, without expecting anything in return. This is not a sale, not a loan—just a gesture of goodwill.

In many families, gifting assets to children, relatives, or even friends is done out of love. But doing it without documentation can lead to legal troubles, family conflicts, or even future tax issues. That’s where a Gift Deed becomes essential.

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What Is a Gift Deed?

A Gift Deed is a legal and voluntary document that transfers ownership of an asset from one person to another without any monetary exchange. This transfer is permanent, and once the Gift Deed is signed and registered, the giver cannot take the gift back—unless certain conditions apply.

The best part? It is completely legal, and when done right, it can offer peace of mind for both the giver and the receiver.

When and Why Should You Use a Gift Deed?

✔ Gifting Land or House to Children

If you want your child to inherit your property during your lifetime, a Gift Deed can help transfer ownership without delay or court intervention.

✔ Transferring Property Within Family

It’s commonly used among parents, grandparents, siblings, or even spouses to transfer assets like farmland, flats, or money.

✔ Avoiding Legal Hassles Later

Without documentation, a relative might question the gift later and cause disputes. A Gift Deed puts everything on record.

✔ Availing Tax Benefits

Under the Income Tax Act, gifts between specified relatives are exempt from tax, but only if they’re properly documented with a Gift Deed.

Why Is a Gift Deed So Important?

Let’s understand in simple terms why skipping a Gift Deed can lead to major problems:

1. Gives Legal Clarity

If there’s no Gift Deed, it becomes difficult to prove the ownership later, especially if the donor is no longer alive. This can result in disputes, legal cases, and family stress.

2. Ensures the Gift Is Valid

According to Indian laws, oral gifts or handwritten notes are not legally accepted for immovable properties. A Gift Deed is the only valid way to transfer land or house.

3. Prevents Property Conflicts

Let’s say a parent gives a house to one of their children, but doesn’t create a Gift Deed. After the parent’s death, the other siblings may challenge it. A registered Gift Deed avoids such complications.

4. Differentiates from a Sale

A sale involves money and taxation. A Gift Deed is free from such obligations—as long as it's between specified relatives and the deed is properly registered.

5. Reduces Tax Burden

For instance, if a father gifts ₹15 lakh to his daughter, she won’t be taxed—only if a valid Gift Deed is executed. Otherwise, the gift could be considered taxable income.

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What Should a Gift Deed Include? (Gift Deed Format)

Creating a Gift Deed isn’t complicated, but it should be drafted with correct legal terms and details. Here's a realistic format breakdown:

1. Title

Should clearly say “Gift Deed”.

2. Execution Date

The date on which the deed is made and signed.

3. Details of the Donor

• Full Name
• Address
• Relationship with the recipient
• Proof of identity (Aadhar, PAN, etc.)

4. Details of the Recipient

• Full Name
• Address
• Proof of identity

5. Description of the Gift

Clearly mention:

• If it's property: exact address, dimensions, survey number, type of property
• If it's money: exact amount
• If it's gold/jewelry: weight, karat, valuation

6. Voluntary Declaration

The donor must state that they are gifting the item voluntarily and without pressure.

7. Transfer of Ownership

It must be clearly mentioned that ownership is being given permanently to the recipient.

8. Witness Details

At least two witnesses, with names, addresses, and ID proofs. Preferably, witnesses should not be family members.

9. Signatures

Signatures of donor, recipient, and both witnesses. Thumb impression can be added for extra authenticity.

How to Register a Gift Deed – Step-by-Step (Common Man Guide)

Many people get confused when it comes to registration. Here's a simple and clear step-by-step guide:

Step 1: Draft the Gift Deed

You can draft it yourself or take help from a lawyer.

Step 2: Buy Stamp Paper

Based on the state's stamp duty rates, purchase appropriate value stamp paper.

Step 3: Execute the Deed

Get it signed by donor and recipient in presence of two witnesses.

Step 4: Visit the Sub-Registrar’s Office

Take all original documents, ID proofs, photographs, and the Gift Deed.

Step 5: Complete the Registration

Pay the registration charges, submit documents, and complete biometrics (as per location). You’ll receive a certified registered copy soon after.

Stamp Duty & Charges in Different States (2025 Update)

Here’s an approximate guide (actual rates may vary):

Tip: If gifting within family, mention the relationship clearly in the deed to get lower charges.

Real-World Example

Lakshmi, a retired teacher in Coimbatore, wanted to gift her 2BHK flat to her son. Instead of just handing over the keys, she:

• Created a Gift Deed with her lawyer
• Paid 1% stamp duty (₹45,000)
• Registered the deed with her son at the SRO

Now her son is the legal owner, and Lakshmi has no worries about disputes from other family members.

Learn how much stamp duty applies when gifting property to your family – Read the 2025 guide here.

Frequently Asked Questions (FAQs)

1. Is it necessary to register a Gift Deed?

Yes. For immovable property, registration is mandatory. Unregistered Gift Deeds are not valid in court.

2. Can I cancel a Gift Deed later?

Only if it’s a conditional gift and conditions are not fulfilled. Otherwise, it cannot be revoked.

3. What is the stamp duty for a Gift Deed?

It depends on the state and whether the gift is to a blood relative. It ranges from 0.5% to 5%.

4. Is there any tax on gifted property?

If the gift is between specified relatives, it is exempt from tax. For others, it may be taxable if value exceeds ₹50,000.

5. Can a Gift Deed be challenged in court?

Only under specific grounds like fraud, coercion, or mental incapacity of the donor.

Final Words

A Gift Deed is a wise and responsible choice for those who want to transfer something valuable out of love—not for money. Whether you are a parent gifting a house to your child, or a brother gifting land to his sister, this one document ensures that the gift is respected, protected, and permanent.

Don’t leave valuable gifts open to confusion, legal disputes, or tax problems. Prepare a Gift Deed, register it properly, and give your gift with peace of mind.