As per Indian law, a gift is the transfer of property from one person known as donor to another person known as donee. Gift is defined under section 122 of the Transfer of Property Act, 1822 as: “ The transfer of a certain existing immovable property made voluntarily and without consideration, by one person, called the “donor”, to another, called the “donee” and accepted by and on behalf of the donee.” Gifts can be two types-
- Lifetime gifts – The gift which is delivered in the donor's lifetime is known as lifetime gift.
- Deathbed gifts - The gift which is delivered in the donor's lifetime but the gift will be in effect after the donor gets expired. These gifts can only be made in effect when the donor dies
Indian real estate laws pertaining to inheritance of acquisition by way of gift are quite simple. However, any person who is residing outside of India cannot acquire plantation/agricultural land/farm house in India by way of gift. Non residential Indian and persons of Indian origin can acquire commercial or residential property by way of gift from a resident of India or an NRI or a PIO.
On the other hand, a foreign national of non-Indian origin residing outside India cannot acquire commercial or residential property in India by way of gift.
As per Section 123 of the Transfer of Property Act, 1822, for the purpose of making a gift of real estate property, the transfer must be affected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.
Section 128 of the Transfer of Property Act, 1822 highlights that where gift consists of the donor’s whole property, the donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of property comprised therein.
Section 125 of the Transfer of Property Act, 1822 highlights that if one property is gifted to more than one person (two or more donees), of whom one does not accept, is void as to the interest which he would have taken had he accepted.
A deed of gift of an immovable property should be registered as provided under the Registration Act, signed by or on behalf of the donor and attested by at least two witnesses. The title cannot be passed if the registration of deed of gift is not done.