Gift Deed Format in India: Rules and Sample

A gift deed is the instrument by which a person transfers property to another voluntarily and without consideration. Section 122 of the Transfer of Property Act, 1882 defines a gift as a transfer of existing movable or immovable property made voluntarily and without consideration, accepted by the donee during the donor’s lifetime and while the donor is still capable of giving. Section 123 requires that a gift of immovable property be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. A gift of movable property may be made either by a registered instrument or by delivery.

The consequence that surprises families is the strictness of Section 123. An unregistered gift deed for immovable property does not transfer anything at all. Possession, an oral promise, and years of undisturbed occupation do not cure it.

What's inside

The four elements of a valid gift

A gift fails if any one of these is missing, and each has produced litigation.

The property must exist now

Section 124 makes a gift of future property void. A donor cannot gift what they expect to acquire later. A deed purporting to gift property the donor does not yet own transfers nothing, though the same intention can often be achieved through a will instead.

The transfer must be voluntary and without consideration

Any consideration, however small, converts the transaction into something else, usually a sale or an exchange, with entirely different stamp duty consequences. Love and affection are not consideration in the legal sense, which is why the phrase appears in almost every gift deed.

The donee must accept during the donor’s lifetime

Acceptance must occur while the donor is alive and still capable of giving. If the donee dies before accepting, the gift is void and the property does not pass to the donee’s heirs. Acceptance can be express or inferred from conduct such as taking possession, but recording it in the deed removes the argument.

The formalities of Section 123 must be met

For immovable property: writing, signature by or on behalf of the donor, attestation by at least two witnesses, and registration. All four, without exception.

The essentials of a gift under the Transfer of Property Act apply equally to a flat in Mumbai and to a share in ancestral land, and the courts have consistently declined to rescue transfers that fell short of them.

Gift deed, will or sale: choosing the instrument

Families often ask for a gift deed when they mean something else. The differences are more important than the labels.

Basis	Gift deed	Will	Sale deed
When it takes effect	Immediately on registration and acceptance	Only on the death of the testator	Immediately on registration
Consideration	None	None	Price paid or promised
Registration	Compulsory for immovable property	Optional	Compulsory
Stamp duty	Payable, often concessional for relatives	None	Full ad valorem
Can it be changed later	Generally no, once accepted	Yes, any number of times	No
Donor retains control	No, unless a life interest is reserved	Yes, entirely, until death	No
Risk to the transferor	High. The transfer is complete and usually irreversible	Low	Not applicable

The practical advice most often needed is this: a gift deed is not a substitute for a will. A parent who gifts the family home and then falls out with the child has generally lost it. A will can be rewritten the following week. Where the objective is to avoid probate while retaining control during life, reserving a life interest in the gift deed is the usual compromise, and it must be drafted expressly.

Where consideration is genuinely passing, the correct instrument is a conveyance, and the distinction between an agreement to sale and a sale deed governs that route instead.

The stamp duty position

Stamp duty on a gift deed is a State subject, and the structure across India is two tiered.

Gifts to specified relatives attract a concessional rate, which in several States is a small fixed amount rather than a percentage. Maharashtra, for example, provides a nominal fixed duty for gifts of residential and agricultural property between specified family members under its stamp legislation. Karnataka applies fixed amounts for a defined list of relatives.
Gifts to anyone else are generally charged at the same ad valorem rate as a conveyance, calculated on the market value of the property.

The gap between the two is the largest cost differential in Indian property practice, which is why the definition of relative carries so much weight.

Two cautions before relying on any figure:

The list of qualifying relatives differs by State. Karnataka’s concessional list, for instance, does not extend to every relationship a family would regard as close, and siblings are treated differently across States. Check the specific article in the State’s stamp schedule rather than assuming.
Rates change with State budgets. Verify the current schedule under the applicable State legislation and the Indian Stamp Act, 1899 framework on the day of execution. The general stamp duty position on agreements applies here as it does to every other instrument.

Registration fees are separate from stamp duty and are also set by the State.

The problem nobody warns families about

This is the part that general guides miss, and it is where competent advice earns its fee.

Four different laws use the word relative, and they do not mean the same thing.

The State stamp legislation defines who qualifies for the concessional duty. This list is usually narrow and specific to each State.
Section 56(2)(x) of the Income Tax Act, 1961 defines relative for the purpose of the donee’s tax liability. Property received without consideration is taxable in the donee’s hands where the stamp duty value exceeds the prescribed threshold, unless the donor falls within the statutory definition of relative.
FEMA and the rules made under it govern whether a transfer to a non-resident donee is permitted at all, and use their own narrower concept of relative.
Personal law determines who can gift what, particularly for coparcenary or ancestral property.

The consequence is that a transfer can be entirely tax free and still non-compliant. An uncle gifting a flat to a niece resident abroad may owe no tax under the Income Tax Act, because the relationship falls within the exemption, while the transfer itself may not be permitted under FEMA, because that relationship is not recognised there.

Anyone drafting a gift deed involving a non-resident donee should therefore answer three separate questions, and never assume the answer to one settles the others:

Does the relationship qualify for concessional stamp duty in this State?
Does it fall within the income tax definition of relative?
Is the transfer permitted to this donee under FEMA?

Tax treatment in outline

Three points cover most situations, though tax advice should come from someone who has seen the full facts.

The donor pays no capital gains tax. A gift is excluded from the definition of transfer for capital gains purposes, so no gain arises on gifting however much the property has appreciated.
The donee may be taxed. Where property is received without consideration and the stamp duty value exceeds the prescribed threshold, the donee is taxed on that value as income from other sources, unless the donor is a relative within the statutory definition or the transfer falls within another exemption such as on the occasion of marriage or under a will.
The donee inherits the donor’s cost and holding period. When the donee eventually sells, the cost of acquisition and the period of holding are taken from the donor, which usually preserves long term capital gains treatment.

There is also a clubbing rule to watch. Income arising from an asset gifted to a spouse or to a son’s wife is generally taxed in the hands of the donor rather than the donee, which defeats the purpose where the gift was made for income splitting.

Can a gift deed be revoked

The short answer is that a completed gift is generally irrevocable, and Section 126 permits revocation in only two situations.

Revocation by agreed condition

The donor and donee may agree that the gift will be suspended or revoked on the happening of a specified event that does not depend on the will of the donor. Three requirements apply:

The condition must be expressly stated, not merely a wish or an expectation.
It must form part of the same transaction, either in the deed itself or in a contemporaneous document.
It must not depend solely on the donor’s will. A clause allowing the donor to cancel at pleasure is void, and the gift then stands as an absolute gift.

Revocation as in the case of contracts

Where the donor’s consent was obtained by coercion, undue influence, fraud or misrepresentation, the gift may be rescinded on the same grounds as a contract. This is the route used where an elderly donor was pressured into signing, and it requires proof rather than assertion.

What Section 126 does not allow is revocation because the donor changed their mind, or because the donee proved ungrateful, or because a promise of care was not honoured. That last situation is the most common family grievance, and the answer is drafting rather than litigation: if continued maintenance of the donor is the real basis of the gift, it must appear as an express condition in the deed. The rules on revocation of a gift are narrow by design, because the alternative would make every registered gift provisional.

Note also that certain welfare legislation for senior citizens provides a separate statutory route to declare a transfer void where a promise of maintenance is not kept, which sits outside Section 126 and is worth checking in any case involving an elderly donor.

What a gift deed must contain

Work through this list. The first four are the ones that fail most often.

Parties. Full name, age, parentage, address and PAN of donor and donee, and the exact relationship between them, since the relationship determines the stamp duty.
Recital of ownership. How the donor acquired the property, with the earlier instrument identified. This is the buyer’s title chain in a later transaction.
Express words of gift. That the transfer is made voluntarily, out of natural love and affection, and without any consideration whatsoever. State this plainly.
Acceptance. That the donee has accepted the gift, and that acceptance is recorded during the donor’s lifetime. Have the donee sign the deed.
Property schedule. Complete description with survey or plot number, area, boundaries, and registration particulars. A defective schedule is fatal at the sub-registrar and worse later.
Delivery of possession. When possession passes, and whether the donor retains any right of residence.
Life interest, if reserved. If the donor is to retain the right to occupy or to receive rents for life, say so expressly, and describe what the donee takes in the meantime.
Conditions, if any. Any condition on which the gift may be revoked, drafted to satisfy Section 126.
Encumbrance warranty. That the property is free from mortgage, lien and attachment.
Costs. Who bears stamp duty and registration charges. Usually the donee, but say so. Along with jurisdiction and notices, this sits among the boilerplate clauses that are omitted from family documents precisely because everyone assumes goodwill will settle them.
Execution and attestation. Signature of donor and donee, and two attesting witnesses, followed by registration.

Where the donor cannot attend the sub-registrar personally, execution and registration can be admitted through an attorney holder, provided the power of attorney expressly authorises it. A general authority to manage property is not enough.

Sample gift deed

A structural outline, not a completed document. Adapt to the State and to the family’s circumstances.

GIFT DEED

This Deed of Gift is executed at ………… on this …… day of …………, 20……

BY: [Name], aged ……, [relation] of …………, PAN …………, residing at ………… (the “Donor”)

IN FAVOUR OF: [Name], aged ……, [relation] of …………, PAN …………, residing at ………… (the “Donee”), who is the ………… [state the exact relationship] of the Donor.

WHEREAS the Donor is the absolute and exclusive owner of the property described in the Schedule below (“the said Property”), having acquired the same by ………… [describe the instrument, its date and registration particulars];

AND WHEREAS the Donor, out of natural love and affection for the Donee, and without any consideration whatsoever, is desirous of transferring the said Property to the Donee absolutely;

NOW THIS DEED WITNESSES AS FOLLOWS:

The Donor hereby transfers by way of gift to the Donee, absolutely and for ever, all his/her right, title and interest in the said Property, together with all rights, easements and appurtenances belonging to it.

The gift is made voluntarily, out of natural love and affection, and without any consideration, monetary or otherwise, having passed or being promised.

The Donee hereby accepts the said gift, and has taken possession of the said Property on the date of this Deed.

The Donor declares that the said Property is free from all encumbrances, charges, liens, attachments and claims of any nature.

The Donor has delivered to the Donee all original title documents relating to the said Property.

[Where a life interest is reserved: The Donor shall be entitled to reside in and enjoy the said Property during his/her lifetime, and the gift shall take effect subject to that right.]

[Where a condition is imposed: This gift shall stand revoked upon the happening of …………, being an event not dependent on the will of the Donor.]

All stamp duty, registration charges and incidental expenses of this Deed shall be borne by the …………

SCHEDULE OF PROPERTY [Full description with survey or plot number, area, boundaries and registration particulars]

IN WITNESS WHEREOF the Donor and the Donee have signed this Deed on the date first written above.

Donor: ………… Donee: ………… Witness 1: ………… Witness 2: …………

Clause 3 is the one that most often decides a challenge, and clause 7 must be drafted with Section 126 open in front of you.

Six failures that invalidate or unravel a gift

No registration. The single largest category. An unregistered gift of immovable property is void, whatever the family understood.
Acceptance not recorded. Where the donor has since died, proving acceptance during their lifetime becomes a factual dispute the donee may lose.
Revocation clause dependent on the donor’s will. Void as a condition, and the gift takes effect absolutely, which is the opposite of what the donor intended.
Gift of future property. Void under Section 124.
Wrong relationship stated. Concessional stamp duty claimed on a relationship that does not qualify in that State leads to a demand for the deficiency with penalty.
Vague property schedule. Rejected at registration, or ambiguous decades later when the donee tries to sell.

These are omissions and mis-descriptions rather than errors of expression, which is the consistent pattern across common mistakes made while drafting business contracts and applies with more force to conveyancing, where the document is read long after everyone involved has forgotten the circumstances.

Related instruments in the same transaction

A gift rarely stands alone in family property planning.

Where the family intends a transfer for value rather than a gift, the sale deed route applies, with full ad valorem duty on the sale of immovable property under the Transfer of Property Act, 1882.
Where a donee is given property and then lets it, the letting is governed by a separate rent agreement in the donee’s name.
Where the gifted property is an interest in a family business rather than land, the transfer sits within the partnership deed and its provisions on admission and transfer of shares.
Where the donor gives an assurance about title, the indemnity clause is what makes that assurance worth something if a defect emerges later.
Where the property sits in a project governed by the real estate regulator, the transfer must respect the key provisions of the Real Estate (Regulation and Development) Act, 2016 and any restriction in the builder buyer agreement.

Where a gift is later challenged, the dispute usually proceeds as a civil suit for cancellation of the instrument, often preceded by a legal notice.

Learning to draft a gift deed properly

A gift deed looks like the simplest instrument in property practice. It has no price, no payment schedule, no negotiation. That is exactly why it is drafted carelessly, and why so many are challenged decades later by people who were not born when it was signed.

The skill is in the parts that carry no obvious commercial tension: recording acceptance, describing the property precisely, drafting a revocation condition that survives Section 126, and confirming that the relationship claimed actually qualifies in that State. None of it is difficult once you know to look, and all of it is invisible if you do not. That habit of drafting for the reader who arrives in twenty years runs through the basic principles of legal drafting, and building it is most of what improving drafting skills amounts to in practice.

LawMento’s Practical Training in Drafting of Contracts covers gift deed, sale deed, lease and mortgage deed in Module 6, within a course spanning 30 or more contract types across 26 hours and 230 pages of reading material. For the regulatory side of property work, the RERA and Real Estate Laws course covers the statutory framework these instruments sit inside, and both build on the foundation in contract drafting as a discipline.

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Frequently asked questions

Is registration of a gift deed mandatory in India?

For immovable property, yes. Section 123 of the Transfer of Property Act requires a registered instrument attested by two witnesses, and Section 17 of the Registration Act, 1908 makes it compulsorily registrable. An unregistered gift deed of immovable property is void and transfers no title. Movable property may be gifted by delivery without registration.

Can a gift deed be cancelled or revoked?

Only in the two situations permitted by Section 126: where the parties agreed in the deed that the gift would be revoked on a specified event not dependent on the donor’s will, or where consent was obtained by coercion, undue influence, fraud or misrepresentation. A donor cannot revoke simply because they changed their mind.

How much stamp duty is payable on a gift deed to a blood relative?

Most States provide a concession, and several charge a small fixed amount rather than a percentage. The qualifying list of relatives differs by State and does not always include siblings. Verify the applicable article in the State stamp schedule before execution.

Is a gift deed better than a will?

They do different things. A gift takes effect immediately and is generally irreversible, while a will takes effect only on death and can be changed at any time. A donor who wants to retain control during life should use a will, or reserve a life interest expressly in the gift deed.

Does the donee pay tax on a gifted property?

Where the stamp duty value exceeds the prescribed threshold and the donor is not a relative within the income tax definition, the donee is taxed on that value as income from other sources. Gifts from relatives, on the occasion of marriage, or under a will fall outside the charge.

Can a gift deed be made to a minor?

Yes. The gift is accepted on the minor’s behalf by a natural guardian, and the minor may accept or repudiate it on attaining majority. A gift carrying obligations should be approached carefully, since a minor cannot bind themselves to onerous terms.

Can a gift be made to a non-resident?

It depends on the relationship and on FEMA rather than on tax law. A transfer that is tax exempt may still be impermissible, because the FEMA concept of relative is narrower. Check both separately before executing.

Can ancestral or coparcenary property be gifted?

Not freely. The donor’s power to gift coparcenary property is limited under personal law, and a gift beyond that power can be challenged by the other coparceners. Take advice on the specific family and property before drafting.

This guide explains the general framework and is not legal advice for any specific transfer. Stamp duty rates, the list of qualifying relatives, tax thresholds and FEMA rules vary and change over time. Verify the current position for the relevant State, and take advice on tax and FEMA separately, before executing any gift deed.