Gift Deed Format in India

A gift deed is the legal document through which any person can transfer or gift his/her property. Only when the gift deed is registered, will the gift of a property be valid and legal. The gift deed is the instrument through which the immovable or movable property owner transfers his/her property to another person for free or without any monetary consideration.

Key Highlights:

• Parties involved in a gift deed: Donor (person who gives gift) and donee (person who receives the gift)
• Property that can be gifted: Both movable and immovable properties
• Registration of a gift deed: Gift deed registration is compulsory for it to be legal and binding
• Stamp duty on gift deed: A stamp duty must be paid on gift of immovable properties
• Tax on gifted properties: Taxed if the gift exceeds ₹50,000; however, exempt in certain cases like transfer between relatives

What is a Gift Deed? 

In India, gifts are governed by the Transfer of Property Act, 1882 (“Act”). A gift of a property involves transferring the ownership of one’s property to another person through a gift deed. 

The gift deed is the document that contains all the provisions related to the gift. The person gifting his/her property is called the donor, and the person accepting the gift is the donee. 

For a gift to be legal and valid: 

• The donor should be an adult. Donee can be a minor, company or an institute.
• The donor must voluntarily gift/ transfer the property to the donee without any consideration, i.e., the donor should not receive anything from the donee for making the gift. 
• The donee should accept the gift within the lifetime of the donor for the gift to be legally valid.
• The gift deed must be registered with the Registrar or Sub-Registrar's office for it to be recognised under the law.
• Both the donor and donee must be present at the Registrar or Sub-Registrar's office at the time of gift deed registration.
• When the gift deed is registered, the transfer of the property from the donor to the donee takes place immediately, and the parties need not go to court for its execution. 

What Are the Clauses in a Gift Deed?

• Details of Donor and Donee – The gift deed should mention the name, address and relationship between the donor and donee. 
• Consideration – The gift deed should mention that the donor is transferring the gift property out of love and affection towards the donee, and there is no consideration of any other type involved in the transfer. 
• Voluntary Transfer – The gift deed should mention that the donor is voluntarily and freely transferring the ownership of the gift property to the donee. The transfer shall be free of any fear, coercion or threat. 
• Ownership of Property – The gift deed should mention that the property is in existence, and the donor is the absolute owner of the gift property, and the donor has delivered the possession of the gift property to the donee. 
• Property Details – The gift deed should specify the detailed description of the gift property. 
• Rights of the Donee – The gift deed should mention the rights of the donee. It includes the rights of the donee to enjoy the property peacefully and sell or mortgage or lease the property. 
• Acceptance by Donee – The gift deed should mention that the donee accepts the gift of the property.
• Delivery – The gift deed should mention the intention of delivering the possession of the gift property, expressly or impliedly. 
• Witnesses – The gift deed should mention the name and address of the witnesses. It should be signed and attested by at least two witnesses mandatorily.
• Revocation – The gift deed need not have a revocation clause of the gift property, but it is advisable to avoid any conflict in the future.

Gift Deed Format

Download Gift Deed Format

Sample Format of a Gift Deed

Below is the sample of the gift deed format. Click on the link provided above to download the entire format of a gift deed:

Who Are the Parties in a Gift Deed?

There are mainly two parties in a gift deed, i.e., donor and donee. 

• The donor is the person who gifts his/her property
• The donee is the person to whom the property is gifted 

The donor should be an adult (18 years or more), having a sound mind and must be competent to enter into agreements at the time of making the gift deed. A minor is incapable of gifting property as he/she is incapable of entering into agreements. However, the guardian of a minor can accept the gifts given to a minor on his/her behalf.

What Properties Can be Gifted Through a Gift Deed?

• Donor can gift both immovable and movable properties. 
  • Immovable property means land, building, house, flat or any benefits arising out of land or anything attached to the earth 
  • Immovable property does not include growing crops, standing timber or grass 
  • Properties not considered immovable are considered as movable properties. 
  • Movable properties include cash, jewellery, vehicles, clothing, cash, furniture, electronics, etc.
• Donor can gift only the properties that are existing and transferable at the time of registering the gift deed. He/she cannot gift the property which he/she expects or will get in future. 
• Donor can gift only the properties of which he/she is the lawful owner. The donor must be owning the property of the gift at the time of making the gift.

What is the Process of Registration of Gift Deed?

Under Section 123 of the Transfer of Property Act, 1882, the gift of immovable property is valid when gifted through a registered gift deed signed by the donor and the donee and attested by two witnesses. Thus, registration of the gift deed is mandatory when the donor wishes to gift immovable property to the donee. 

The gift of movable property is valid when gifted under a registered gift deed or by giving delivery of the property to the donee. 

Here is the process of registration of a gift deed:

Step 1: Draft the gift deed containing all the clauses (as mentioned above) on stamp paper. 

Step 2: Both the donor and donee should sign all pages of the gift deed. It must be signed by at least two witnesses.

Step 3: Pay the stamp duty on the gift deed. The value of the stamp paper on which the gift deed is executed varies from state to state. It usually ranges from 1%-7%, depending on the state.

Step 4: The parties of the gift deed and the two witnesses should visit the Registrar or Sub-Registrar’s office under whose jurisdiction the property to be gifted is situated. Take a prior appointment at the Registrar or Sub-Registrar’s office for registration, if required. If the property is movable, visit the Registrar or Sub-Registrar’s office of the area where the donor resides.

Step 5: The respective authorities in the Registrar or Sub-Registrar's office will verify the gift deed and the documents, check the stamp duty payment and register it.

Step 6: The Registrar or Sub-Registrar's office will issue the registered copy of the gift deed. 

Documents Required for Gift Deed Registration

Here are the documents you need to submit at the Sub-Registrar's office for registration of a gift deed:

• Original gift deed executed on a stamp paper
• Identity proof of donor and donee (Aadhaar card, Voter ID, driving license or passport)
• PAN card of the donor and donee
• Identity and address proof of the witnesses (Aadhaar card, Voter ID, utility bills or passport)
• Proof of ownership of the property to be gifted (sale deed or title deed)
• Encumbrance certificate, in case of gift of land, house or flat
• No objection certificate, in case of agricultural land transfers

How to Draft a Gift Deed?

The process of drafting a gift deed is as follows:

• Mention the date and place of execution of gift deed at the top.
• Mention the information about both parties, including their names, age and addresses.
• Mention the complete property details.
• Mention that the donor is the owner of the property along with the details of the proof ownership of the property.
• Mention the relationship between the donor and donee.
• Mention that there is no consideration and gift is made out of natural love and affection.
• Mention the rights of the donee.
• Mention that the property is transferred to the done.
• Get the signatures of donor, donee and two witnesses on the deed.
• Print the draft on stamp paper and proceed with the registration of gift deed at a sub-registrar’s office.

What Are the Tax Implications of Gift Deed?

Under the old Income Tax Act, 1961 (Effective till 31 March 2026)

Before 1 April 2026, gifts were taxed under Section 56(2)(x) of the old Income Tax Act, 1961. Under the 1961 Act, gifts received exceeding ₹50,000, was taxed in the hands of the donee. However, if the property or amount was received from relatives, received on the occasion of the marriage of the individual, received under a will, received in contemplation of the donor's death, received from a local authority, trust or institution, then tax on the gifts was exempted.

Under the current Income Tax Act, 2025 (Effective from 1 April 2025)

After the introduction of the Income Tax Act, 2025, gifts are taxed under Section 92(2)(m). Thus, any gifts made from 1 April 2026, will be taxed as per the provisions of Section 92(2)(m) of the Income Tax Act, 2025:

• Under Section 92(2)(m)(i): When any person receives a sum of money exceeding ₹50,000 without consideration as a gift, then the whole of the gift amount will be taxed in the hands of the donee under the head ‘Income from other sources’.
• Under Section 92(2)(m)(ii): When a person receives an immovable property without consideration as a gift, and the stamp duty value of the gift deed property exceeds ₹50,000, then the stamp duty value of the property is taxable in the hands of the donee under the head ‘Income from other sources’.
• Under Section 92(2)(m)(iii): when a person receives a movable property without consideration as a gift, and the aggregate fair market value of the property exceeds ₹50,000, then the whole of the aggregate fair market value of the property is taxable in the hands of the donee under the head ‘Income from other sources’.

Tax Exemptions on Gifts Under Income Tax Act, 2025

If the property or amount is received from any of the following persons, then the taxation on the gift is exempted, and the donee will not be taxed:

• If the gift is received from relatives, or
• If it is received on the occasion of the marriage of the individual, or
• If it is received under a will or by way of inheritance, or
• If it is received in contemplation of the death of the donor, or
• If it is received from a local authority (defined in Schedule III of the Income Tax Act, 2025), or
• If it is received from any registered non-profit organisation, except when received by any related person, or
• If it is received by way of a transaction not regarded as transfer under Section 70(1) of the Income Tax Act, 2026, or
• If it is received from an individual by a trust created or established solely for the benefit of relative of the individual, or
• If it is received from such class of persons and subject to such conditions, as may be prescribed.

What are the Advantages of a Gift Deed?

• The donee becomes the legal owner of the property once the gift deed is executed and registered.
• A registered gift deed serves as legal proof of ownership and helps minimise family or inheritance disputes.
• The property can be transferred without any sale consideration.
• Enables the donor to distribute assets during their lifetime according to their wishes.
• Gifts received from specified relatives are exempt from income tax under the provisions of the Income Tax Act, 2025.
• Property transferred through a gift deed does not form part of the donor's estate after the transfer, helping avoid probate-related issues in many cases.
• Once validly executed and registered, a gift deed provides legal protection to both the donor and the donee.
• A registered gift deed cannot be revoked unless specific conditions for revocation are provided in the deed and permitted by law.

A gift deed is a legally recognised way to transfer property or assets without monetary consideration. Using the correct gift deed format with donor, donee, property details, and acceptance ensures validity and reduces disputes. For immovable property, registration and stamp duty compliance are essential before execution for a smooth transfer.

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