Gift Deed & Settlement Deeds
Gifting property is simple in concept and easy to get wrong in execution. A gift of immovable property is not complete until the deed is executed and registered, and the wording of the deed decides what happens if the arrangement later breaks down.
How a gift of immovable property works
Under the Transfer of Property Act, a gift of immovable property is made by a registered instrument signed by the donor and attested by at least two witnesses. Possession is not what transfers the property - registration is. A deed kept in a drawer transfers nothing, however clear its words may be.
The deed must identify the property precisely, state the relationship between donor and donee, record that the transfer is voluntary and without consideration, and provide for acceptance, which the donee signifies by signing.
The points where gifts turn into litigation
- Gifting to a minor: the deed should appoint a guardian to hold and manage the property for the child, and later sale or mortgage requires the court's permission under the Guardians and Wards Act.
- Reserving a right: a donor who wants to keep living in the house should reserve a life interest or a licence in the deed. Once registered, an unrestricted gift cannot be undone by a promise that was never written down.
- Gifting to avoid creditors or claims: a gift made to defeat creditors can be questioned, and a gift of the whole of one's property without providing for dependants invites litigation.
- Stamping and mutation: the deed must be stamped as the West Bengal schedule requires and presented for registration within the period the law provides, then mutated in the municipal or land records so that tax records follow ownership.
Documents we need
Previous title deed and the chain of documents; current tax receipts and the holding number for a Kolkata property; khatian and plot details for land; identity and address proof of both parties; passport photographs; and the donee's acceptance details. For a gift by an attorney holder, the power of attorney itself.
Common questions
Can a gift deed be cancelled after registration?
Only in the limited circumstances the law allows, such as fraud, coercion, undue influence or a condition the deed itself makes revocable. A registered gift cannot be recalled because the relationship later soured.
Is stamp duty payable on a gift to a family member?
Concessions in the state schedule can apply where the gift is to a blood relative, and the rate depends on the relationship and the nature of the property. We work out the applicable duty on the value of the property before the deed is typed, so the document is not returned at the registry.
Do I need the donee present for registration?
The donor must be present for admission of the deed. Where the donee accepts the gift by an endorsement, the practice of the registry decides how the acceptance is recorded, which we confirm before the appointment.
Getting it done
FileX Advocates & Legal Consultants drafts, files and argues these matters in Kolkata — the Calcutta High Court, City Civil and Sessions courts, the family, consumer and tribunal forums, and before the registering authorities. Send us the papers you have and we will tell you what is missing before anything is filed.