Everything You Need to Know About Gifting a Property in India

Section 122 of the Transfer of Property Act defines ‘present’ as the voluntary transfer of certain current transportable and immovable assets from a donor to a donee. There are, nevertheless, some requirements for a present, such as the present being physical and its possession being transmitted through the donor and normal through the donee. 

Which assets may be transferred?

You cannot exhibit all that you own. If you are a Hindu, you can get rid of your self-made possessions. Similarly, if you are a coparcener, you can sell your coparcenary hobby in exchange for assets, subject to certain requirements being met. A widow may present a tiny portion of the assets inherited from her husband in certain circumstances, but she cannot do so by will.

What distinguishes a gift from a selling deed?

In a selling deed, you give up your own home in exchange for money. The deed is recorded, indicating how much you were paid for the assets sold. However, if it’s miles present, it’s miles a relinquishment of your property with no monetary consideration. The government no longer receives gifts from unloved ones; instead, it gets money from stamp duty on real estate transactions.

Can a gift be revoked?

A gift is binding on the donor as soon as it is finished. It cannot be reversed by him until the assets have been stolen from him by fraud or undue influence.

When may a gift be taxed?

Normally, the donor is not liable to pay any tax on the assets he has donated. However, in some cases, beneficiaries are taxed under the heading ‘Income from Different Sources’ under the Income Tax Act of 1961. Gifts are not taxed if they are received from loved ones during the marriage, through bequest or inheritance, or from any neighborhood authority, fund, or foundation recognized under Section 12AA. A relative might be the donor’s spouse, sibling, spouse’s sibling, sibling of both parents, and so on. Aside from this, an asset bought via an individual is taxable if the stamp duty cost of such an item acquired without consideration (land, building, or both) exceeds Rs 50,000.

To generate a gift of immovable assets, the switch should be registered, signed by or on behalf of the donor, and attested by at least two witnesses. The stamp requirement, calculated based on the market value of the assets (which varies in each kingdom), shall be paid at the time of registration. Within the matter, however, each state has its own set of laws. In Rajasthan, for example, no stamp duty is required if a spouse gifts an immovable asset to his wife. However, if the assets are being transferred within the call of a father, mother, son, sister, daughter-in-law, grandchild, or daughter as a present, 2.5% of the cost of the asset must be paid as stamp duty.

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