Gift deed is a record keeping exercise in lieu of the gift being given voluntarily to a relative. And though not mandatory, it establishes a valid record between the donor and the done. For the purpose of executing a gift deed, gift can be both an immovable or moveable asset that is tangible as well as transferable.
How the gift deed is drafted?
For drafting a gift deed, donor's consent has to be highlighted that the gifting is being made by one's own will and he or she is not bankrupt and in fact is in a solvent condition. Also, another premise that is needed in the scheme is that the gift is being made not against any consideration amount.
After the gift deed is executed, next comes the acceptance by the done and that is to be depicted by his or her sign on the deed. Further, the substance to the matter is given by his or her acceptance to the possession of the gift. The gift however needs to be accepted during the lifetime of the donee as else it will be rendered invalid.
In case of a property i.e. being gifted, the gift registration needs to be made under the Transfer of Property Act. And herein title lies with the donor unless and until the registration process of the immovable property is completed. And based on the property value, stamp duty is payable and to arrive at the fair value of the immovable property, valuers are appointed.
Herein, few of the important points to note include that once a gift deed is entered into between two parties, it cannot be revoked.
And as per income tax act, in the hands of the done, any such gift received is not taxable.
Further, if any gift is being given to a minor then a guardian on his or her behalf can accept the gift as the minor child is not allowed to enter into a valid contract.