According to Section 122 of the Transfer of Property Act, “Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person called the donor, to another person called the donee, and accepted by or on behalf of the donee. As the name says, it is a gift which shall generally involve the transfer of ownership of a property, which may be in the form of a moveable or immoveable, and shall be delivered by one person to the other. Such transactions shall be recorded in a Deed or in a legal document, which shall be executed between the Donor (the person who will deliver the Gift) and the Donee (the Person who will accept the Gift). Most importantly such transfer must be made voluntary.
Parties in a Gift Deed
There are two parties in a gift deed, i.e. donor and donee. The donor is the person who gifts his property, and the donee is the person to whom the property is gifted. The donor should have a sound mind and must be competent to enter into agreements at the time of making the gift. 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. The donor should make a gift without any consideration, i.e. the donor should not receive anything from the donee for making the gift.
Essential Key Elements to Gift Deed
There are some essential key elements to make a gift deed valid:
1. The Donor shall transfer the ownership to the Donee;
2. The property which must be transferable as per the Sec-5 of the Transfer of Property Act, 1882;
3. The transfer must be done without any compensation or consideration in monetary value, Also such transfer must be made voluntarily, with the free consent of the Donor;
4. The acceptance must be made during the lifetime of the Donor and while he is still capable of giving.
5. A gift that is made shall be of any specific movable or immovable property, that must be in existence while transferring the same;
6. The gift must be tangible;
7. Delivery of possession shall be the important aspect of transfer of the gifted property;
8. If at any situation the Donee dies before the acceptance, it shall become void.
Any valid owner of an existing property can gift property. A minor is incompetent to gift a property though a guardian can accept such a gift on his behalf. A movable property, or immovable property, or an existing property that is transferable, can be gifted and require a gift deed. Having a registered gift deed, will help you avoid any litigation that comes up thereafter.
Types of gifts
1. Inter vivos– these gifts were donated during the donor’s lifetime and consists of interests
of present or future.
2. Causa mortis – These are deathbed gifts, which is a future gift made with the anticipation
of the donor’s death. This type of gift is not valid unless the donor dies of the impending
sickness, predicting which he had made the gift.
3.Outright - These types of gifts are made free of any restrictions.
4. Onerous – Made with the burden or obligation imposed on the donee.
5. Remunerative – Made to compensate for services delivered.
Registration of the Gift Deed
The gift deed should be registered as per Section 17 Registration Act, 1908 and Section 123 of the Transfer of Property Act. The gift deed shall be made on a stamp paper and to be registered at a sub-register office. The charges of the stamp paper depend on the charges stipulated by the state government. The gift deed shall be registered with the signature from the donor, donee and two witnesses. The registrar will attest the gift deed.
In case of Minor.
Since contracts with a minor avoid ab into, and a gift deed is a legal contract, Minors are not eligible to be a donor and therefore a gift deed where the minor is the transferrer is not valid in the eyes of law. In a circumstance where the donee is a minor, a natural guardian has the right to accept the gift on his behalf.
Lastly the concept and the subject matter of the gift have been age-old and it was a distinct facet in the Property Law. Then all the rules, regulation and procedure regarding the Gift lay down in the Transfer of Property Act, 1882. There are certain essentials of a gift like: it is a transfer of certain existing moveable or immoveable property made voluntarily and without consideration. It must transfer the ownership of the property, must have been made voluntarily, the donor must be competent and legally eligible to make the transfer and the transferee must accept that transaction and if the donee dies before the acceptance, the gift becomes void.