A cash gift deed is an agreement through which the donor (person paying the money) can gift money to the donee (receiver of the money) without any other exchange or consideration. It shows a voluntary transfer of cash from one person to the other as a gift. This deed specifies the amount of money that is to be transferred and conditions of such gift if any.
A gift deed for gifting cash is an important document, especially while gifting a large amount of money since it records the act of giving a gift. It creates a valid documentary record. Both for the doner and donee, a gift deed ensures proof of such transfer and thus avoids confusions and misuse that may arise in the future.
The following points should be covered in a gift deed for cash to family members:
Details of the donor and donee (name, date of birth, residence, relationship to each other, father’s name, etc.)
The amount of money being gifted,
Reason for gifting, if any
Clause stating that the deed has been made voluntarily, without force or coercion,
Clause stating that the donor is solvent and not bankrupt,
Clause stating that the gift is being made without any consideration.
Date and place of the deed,
Conditions or requests, if any,
Signatures of the donor and the donee and
Signatures and details of 2 witnesses.
GIFT DEED
This deed of gift made this ______ Day of __________(month) ____________ (year) between;
Mr. __________________, Age ____years,
Resident of _____________________
(Hereinafter called the “Donor”) of the One part
And,
Mr/Miss ___________________, Age ____ years,
Resident of __________________
(Hereinafter called the “Donee”) of the other part.
Witnesseth as follows:
In consideration of natural love and affection being the son/daughter of Donor, the donor hereby assigns to the donee a sum of Rs._____________ (amount) to be held by the donee absolutely.
The possession of the Rs._____________(amount) vide cheque No. ________Drawn on _____________________ , _____________ Branch dated _/_/__ hereinabove donated unto the donee and has been physically handed over to the donee as absolute owner before execution of this Gift Deed.
The said gift of Rs.______________(amount) has been accepted by Mr/Miss ___________________________.
The donor from this date reserves no right or interest on the said sum hereby gifted which shall from this day be the sole and exclusive property of the donee.
The property hereby gifted is the donor’s self-acquired property accumulated out of income earned and has full right and authority to dispose of the same in any manner he may think fit.
In witness whereof, the parties hereto have put their respective signatures on this deed of gift in presence of witnesses.
SIGNATURE, NAME AND Donor
ADDRESS OF THE WITNESS ________________________
______________________ (______________________)
______________________
______________________
______________________ _________________________
_______________________ (__________________________)
No specific documents are required in order to draft and execute a gift deed. However, ID proofs of the parties in order to confirm the names and permanent addresses of the donor and donee should be scrutinised. Documents evidencing clear title of the bank accounts of the donor in question could also be examined.
A gift deed for cash shall be drafted with the help of a lawyer. Gifting is a voluntary action and the gift deed should mention that the donor is gifting the money in question without any coercion or force and by his/her own choice. Acceptance of the donee to receive such gift should also be mentioned in the deed - by way of donee’s signature. A gift deed for cash should be registered if mandatory under Registration Act. Stamp duty shall also be paid as per the value of the gift and the laws in the particular State.
A gift deed for cash is not required to be registered as per the Registration Act 1908, however, one can register a cash gift deed in order to keep a record of the transaction. A registered gift deed acts as evidence in the court, in case any dispute relating to the transaction arises.
The gift deed should state the acceptance by the Donee and the willingness of the Donor to gift the cash. The deed should also declare that the donee is not bankrupt (i.e. solvent), the gift is being made without any consideration in return and that the donor is giving the gift by his/her own choice without any force or coercion.
A minor cannot enter into a valid contract in India and hence cannot make a valid gift deed., although, a guardian can accept the gift on behalf of a minor. A gift once made cannot be revoked. It is also important to know that gifts made to relatives defined under the Income Tax Act are exempt from tax in the hands of the donee.
A gift deed is a legal document and thus hiring a documentation lawyer for the purpose of drafting and execution of it is an important step. A documentation lawyer, owing to his years of experience in handling gift deeds, can guide you through the procedure of drafting, registration and stamping of the same. He/she can ensure that all legal formalities are fulfilled while transferring your money by way of gift deed and that no legal harm is done to the donor or donee during such a transaction.
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