Gift Deed under the Transfer of Property Act, 1882

Property has always been a word that has been very closely associated with the extremely possessive nature of human beings. 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, 1882 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.” A gift under the Act takes effect during the lifetime of the donor:

Lifetime gifts – The gift which is delivered and accepted in the donor’s lifetime is known as a lifetime gift. A valid gift under the Act must be made and accepted while the donor is still alive.

A disposition intended to take effect only after the donor’s death is not a gift under the Transfer of Property Act, 1882, but a testamentary disposition - that is, a will - governed by succession law. Section 129 of the Act expressly excludes donations mortis causa (deathbed gifts) from its scope, and such donations are in any case confined to movable property under Section 191 of the Indian Succession Act, 1925.

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, 1882, 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, 1882 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.