FAQs: Gifting of Property

Q: What is the process of gifting a property?
A: To gift an immovable property, both parties need to sign the transfer document, which has to be attested by at least 2 witnesses. The process won't be completed until the stamp duty is paid during the registration period.

Q: Can a person gift property to an individual?
A: Yes.

Q: Is gifted property taxable?
A: Usually, the donor is not required to pay any tax, while the receiver is required to put it under “ Income from other sources.” However, according to Section 12AA, gifts received from relatives on the occasion of marriage, by will or inheritance, or from any local authority, fund, or foundation are not taxed.

Q: What are the disadvantages of a gift deed?
A: The disadvantages of a gift deed are: The donor will be legally bound to follow it, and even if he decides later that he wants to keep the property, he will not be able to do so. It can be challenged by the court or by someone else just by stating that the intention of the donor has been clouded or that the donor was not of sound mind when he made the decision. This will result in long legal proceedings. The donee's intention behind this transfer can be to save on tax.

Q: Is gifting property legal?
A: Yes.

Q: Which is better- a Will or a Gift Deed?
A: Both things play different roles a will allows a person to have control and ownership over a property till his lifetime, while a gift deed makes a person lose the ownership of the property.

Q: Is blood relation necessary for a gift deed?
A: No.

Q: What is the difference between a transfer of property and a gift deed?
A: A gift deed can be out of love and gratuity, and hence no blood relation is necessary for the transfer of ownership, while in the case of a transfer deed, the transfer of ownership can only be among blood relations.

Q: What is the validity of a gift deed?
A: Any gift that has been made and accepted has no limit and cannot be revoked ever.

Q: Who are blood relatives for gift deeds?
A: No blood relation is necessary in the case of a gift deed, though gifting it to a blood relation may reduce the stamp duty. The blood relations mentioned are- Son, Daughter, Grandson, Granddaughter, Brother, Sister, Father, Mother.

Q: What is the gift tax limit in India 2023?
A: ?50,000.

Q: Is a gift taxable in blood relation?
A: The relations mentioned under the income tax are exempted from gift tax. These relations include- Spouse, Brother or sister, Brother or sister of the spouse, Lineal ascendant or descendant, Lineal ascendant or descendant of the spouse.

Q: What property cannot be gifted?
A: Only the self-acquired property can be gifted one may also give away the coparcenary interest in a property, but there are conditions that need to be fulfilled for the same.

Q: What are the charges for gifting property?
A: There is no definite answer as the cost varies from state to state provisions, but usually, it takes from ?15,000-20,000.

Q: Is stamp duty applicable on gift deeds in blood relations?
A: Yes.

Q: Can the father transfer property to the son?
A: Yes.

Q: Is capital gains applicable on gifted property?
A: If the property is further sold, it will be included in either short-term capital gain or long-term capital gain.

Q: What is the period of holding for gifted property?
A: The holding period is the amount of time you keep a property before selling it.

Q: Is property gifted to the wife taxable?
A: Yes.

Q: Can we take the gift property back?
A: No.

Q: Can a gift deed be challenged after 30 years?
A: No, it can only be done for 3 years.

Q: What is the Supreme Court Judgement on registered gift deeds?
A: In the landmark judgement of Jamuna Bai, the court has held that even if the acceptance should be done when the donor is alive after the death of the donor, the offer of the gift will be invalid.

Q: Can gifted property be cancelled?
A: It can be canceled if there is a mutual agreement among the parties.

Q: Can parents cancel gift deeds?
A: No.

Q: How do I stop a gift deed?
A: A gift deed once signed cannot be revoked.

Q: What happens if the gift deed is not registered?
A: It is considered to be invalid and can be challenged and revoked.

Q: What is the court fee for the cancellation of a gift deed?
A: This differs from state to state and their policies though it usually does not exceed ?1,000.

Advocate Chikirsha Mohanty

Greater Kailash - 1, Delhi
5 years

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