Gift Deed is a transfer of a certain movable or immovable property made voluntarily and without consideration by a person called a donor and accepted by or on behalf of the donee. It is usually made of love and affection
Conditions related to gift deed
- The gift deed must be accepted during the life of the donor and after the death of the donor acceptance of the deed by the donee would not be valid.
- In the event, if a gift comprises an existing and future property, the gift with respect to the future property shall be void.
- Also in case of a gift to more than one donee, if one does not accept, then it will not be valid as to the interest related to that particular donee.
- If in case the gift deed is in the form of two or more different deeds, in such case the donee can accept one and reject the other even if the one is beneficial and the other has obligations with that.
- In case the donor gives away all his property, in that case, the donee is personally liable to the time of the gift related to that particular property.
Execution of the Gift Writing: –
- In case of transfer of immovable property, it must be done by means of a registered instrument signed by and on behalf of the donor and also witnessed by two witnesses also on the payment of stamp according to the state where the property is located.
- In case of transfer of personal property can be done by the registered instrument or on by delivery.
Benefits of Gift Deed under the Income Tax Law: –
Gifts are not considered as taxable income, in general, the gift is excluded from the tax when it comes to taxes, made to a relative as indicated below:
- Son or daughter of the donor
- Parents of the donor
- Parents siblings, i.e. uncle and aunty of the donor
- Siblings, i.e. brother and sister of the donor
- Spouse of the siblings, i.e. sister in law and brother in law of the donor
- Spouse of daughter and son, i.e. daughter in law and son in law of the donor
- Spouse parents, i.e. father in law and mother in law of the donor
- Spouse sibling and their respective spouse, i.e. spouse sister and her husband and spouse brother and his wife..
A Gift Deed made by an NRI to an Individual Indian Resident falling in any of the above-stated. The relation is also exempted from tax, and the donee can utilize it for any of his personal purposes. In this case, an NRI must be regarded in respect of the definition provided in the income tax act i.e.
Any of the following persons:-
- If he or she is not in India in that year for a period amounting in total of 182 days or more.
- In last four years preceding to that year, you have not been in India for a period of amounting in all of 365 days or more, and has not been in India for 60 days or more in that year.