What is Gift deed and difference between gift deed and will deed?

Here are some key points to understand about gift deeds in India

Voluntary Transfer

A gift deed is a voluntary transfer of property rights without any consideration or payment. It signifies the donor’s intention to give the property as a gift and the donee’s acceptance of the gift.

Types of Property

A gift deed can be used to transfer both movable and immovable property. Movable property includes assets like cash, jewellery, vehicles, etc., while immovable property refers to land, houses, or any other fixed assets.

Registration

As per Indian law, gift deeds for immovable property must be registered to make them legally valid and enforceable. Registration involves presenting the gift deed to the Sub-Registrar of Assurances within whose jurisdiction the property is located. Registration requires paying the necessary stamp duty and registration fees.

Stamp Duty and Fees

Stamp duty is a tax imposed on the gift deed, and the rate varies from state to state in India. The stamp duty is generally based on the market value of the property. Additionally, registration fees are charged for the process of registering the gift deed.

Acceptance and Delivery

For a gift deed to be legally valid, it must include the acceptance of the gift by the donee. The donor must deliver the property to the donee, indicating a transfer of ownership.

Revocability

Unlike a will, a gift deed is generally irrevocable. Once the gift is made and accepted, the donor cannot revoke or cancel the gift unless specific conditions mentioned in the gift deed allow for revocation.

Tax Implications

The transfer of property through a gift deed may have tax implications. Under the Income Tax Act, certain conditions and exemptions apply to gifts received by individuals. It is advisable to consult a tax professional to understand the tax implications of a gift deed.

Legal Advice

It is recommended to seek legal advice while preparing and executing a gift deed to ensure compliance with applicable laws, proper drafting, and understanding the implications of the transfer.

Remember that laws and procedures related to gift deeds can vary based on the state in India, so it’s essential to consult with a legal professional or consult the specific state laws for accurate and up-to-date information.

A will deed and a gift deed are both legal documents used to transfer ownership of property, but they differ in significant ways. Here are the key differences between a will deed and a gift deed:

Transfer of Ownership

Will Deed

A will deed, commonly known as a will or last will and testament, is a legal document that outlines how a person’s assets and property should be distributed after their death. The transfer of ownership of the property specified in the will deed occurs only upon the death of the person making the will (testator).

Gift Deed

A gift deed is a legal document used to transfer ownership of property from one person (donor) to another person (donee) during the donor’s lifetime as a voluntary gift. The transfer of ownership takes place immediately upon the execution and acceptance of the gift deed.

Timing of Transfer

Will Deed

The transfer of property specified in a will deed takes effect only after the death of the testator. Until then, the testator retains full ownership and control over the property.

Gift Deed

The transfer of property specified in a gift deed takes place during the donor’s lifetime. Once the gift deed is executed and accepted by the donee, the ownership and control of the property are immediately transferred to the donee.

Revocability

Will Deed

A will deed is generally revocable during the lifetime of the testator. The testator can modify, amend, or revoke the will at any time, as long as they are of sound mind and have the legal capacity to do so.

Gift Deed

A gift deed is typically irrevocable, meaning that once the gift is made and accepted by the donee, the donor cannot revoke or cancel the gift, except in certain specific circumstances mentioned in the gift deed.

Legal Validity

Will Deed

A will deed must go through the process of probate after the testator’s death to establish its validity and ensure the proper distribution of assets according to the testator’s wishes. The probate court examines the will’s authenticity, settles any disputes, and ensures compliance with legal requirements.

Gift Deed

A gift deed, particularly for immovable property, must be registered with the relevant authority to make it legally valid and enforceable. The registration process involves paying stamp duty and registration fees as per the applicable laws.

Purpose

Will Deed

A will deed is primarily used to provide instructions for the distribution of assets and property after the testator’s death. It allows the testator to have control over their property and ensure that it is distributed according to their wishes.

Gift Deed

A gift deed is used to transfer ownership of property as a gift from the donor to the donee during the donor’s lifetime. It allows for the immediate transfer of property rights and is often used to express affection, gratitude, or for estate planning purposes.

It’s important to consult with a legal professional to understand the specific legal requirements, implications, and processes involved in creating and executing a will deed or a gift deed, as they can vary based on the jurisdiction and specific circumstances.

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