Essentials of a valid gift: drafting of a gift deed

Project Submitted to:

Dr. Vikesh Ram Tripathi

[Faculty of Drafting, Pleading and Conveyancing]

Project Submitted by:

Purva Singh

Semester VIII, Section B

Roll No. 119

Submitted on:

06.03.2018

HIDAYATULLAH NATIONAL LAW UNIVERSITY, NAYA

RAIPUR, CHHATTISGARH

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 DECLARATION

I hereby declare that the project work entitled “Essentials of a valid gift: drafting of a gift deed”
submitted to Hidayatullah National Law University, Raipur, is record of an original work done
by me under the guidance of Dr. Vikesh Ram Tripathi, Assistant Professor, Facult of Drafting,
Pleading, Conveyancing, HNLU, Raipur.

Purva Singh
Semester- VIII
Section B
Roll no-119

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 ACKNOWLEDGEMENTS

I feel highly elated to work on the topic “Essentials of a valid gift: drafting of a gift deed”
The practical realization of this project has obligated the assistance of many persons. I express
my deepest regard and gratitude for Dr. Vikesh Ram Tripathi, Faculty of Drafting, Pleading,
Conveyancing. His consistent supervision, constant inspiration and invaluable guidance have
been of immense help in understanding and carrying out the nuances of the project report.
I would like to thank my family and friends without whose support and encouragement, this
project would not have been a reality.
I take this opportunity to also thank the University and the Vice Chancellor for providing
extensive database resources in the Library and through Internet.
Some printing errors might have crept in, which are deeply regretted. I would be grateful to
receive comments and suggestions to further improve this project report.

Purva Singh
Semester- VIII
Section B
Roll no-119

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 TABLE OF CONTENT

Part-I
Chapter-I
Introduction…………………………...............................................................05-06
Objectives……………………………………………………………………..07
Research methodology…………………………………………………..……07
Chapter-II
Zamindari System in India ……………………………………………………08
Chapter-III
The need of Land Reforms…………….……..…………………………….. 09
Objective of Land Reforms ………………………………………………10-11
Chapter-IV
Abolition of Zamindari System in India….………………………………12
Chapter-V
Land reforms and the Judiciary ………………………………………….13-15
Chapter-VI
Ninth Schedule …………………………………………………………..16-17
Conclusion…………………………………………………………………….18
Bibliography…………………………………………………………………..19

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CHAPTER-I

INTRODUCTION

According to Section 122 of Transfer of Property Act, 1882 ‘Gift’ is defined as the transfer
of certain existing moveable and immoveable property made voluntarily and without
consideration, by one person called the donor, to another, called the donee, and accepted by
or on behalf of the donee.
Gift, as defined in this section, is gratuitous transfer of ownership in some existing property
made voluntarily. The definition includes gift of both movable as well as immovable
property. The transferor is called donor and the transferee is called donee.
There are certain essentials of a gift like a must transfer of ownership, the ownership must
relate to a property in existence, the transfer must be without consideration, it must have been
made voluntarily, the donor must be a competent person and lastly the transferee must accept
the gift.
A gift is a transfer of property without any monetary consideration by one person in favour of
another and accepted by him or by a person on his behalf. Transfer without consideration is
called a gratuitous transfer. A gratuitous transfer may take place between two living persons
or, it may take place only after the death of the transferor. Gift may, therefore, be either inter
vivos or, testamentary. Gift inter vivos is gratuitous transfer of ownership between two living
persons and is a transfer of property within the meaning of Section 5 of Transfer of Property
Act, 1882. Gift testamentary is called a will which is transfer by operation of law and outside
the scope of this Act. A gift made during apprehension of death is called a gift mortis causa.
A gift, where both the parties are Muslims, governed by the provisions of Quranic Law, and
by the transfer of Property Act as it is inconsistent with the provisions of this act.

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OBJECTIVES
 To study land reform as a tool for checking zamindari and jagirdari system.
 To study the analysis of land reform over the restraining of zamindari system.

RESEARCH METHODOLOGY
The method adopted for this work was analytical in nature based on empirical and non-
empirical sources.
Legal provisions, case laws, books and other reference as guided by Faculty have been
primarily helpful in giving this work a firm structure. Websites, dictionaries and articles have
also been referred.
Footnotes have been provided wherever needed, either to acknowledge the source or to
point to a particular provision of law.

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CHAPTER-II

MEANING OF GIFT DEED

Gift is the transfer of certain existing moveable or immoveable property, made voluntarily and
without consideration, by one person called the donor, to another person, called the donee, and
accepted by or on behalf of the donee.

A Gift Deed is a legal document describing the voluntary transfer of a property from one person
to another without any consideration as money or value in exchange. Please note that the
property so gifted must be an already registered instrument in order to pass on the ownership
from a donor to a donee, according to the Indian Registration Act, 1908. The executed Gift
Deed must be registered at the respective Sub-Registrar office to make it valid

As per the Section 122 of Transfer of Property Act, 1882, a “gift” is defined as the transfer of certain
existing movable and immovable property made voluntarily and without consideration, by one person
(donor) to another (donee), and is accepted by or on behalf of the donee.

What Does A Gift Deed Include?

A Gift Deed should include the following-

1. Date and Place of execution of the Gift Deed

2. Details of the Donor (Name, Father’s Name, Date of Birth, Address)
3. Details of the Donee (Name, Father’s Name, Date of Birth, Address, Relationship with
Donor)
4. Relationship of Donee with the Donor
5. Details of the property that is being gifted
6. Signatures of Donor and Donee
7. Details of two witnesses in whose presence the deed was executed
8. Signatures of the witnesses

Gift to Minors

A Gift can be made to a donee who is minor, but a minor cannot be a donor. If the donee is a
minor, then his/her legal guardian can accept the Gift in favour of the minor. The guardian shall
manage the property until the minor attains 18 years of age, following which, the donee can
either accept the gift or return it to the donor.

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Gifting Movable Property

Movable properties such as vehicles, cash, jewels, ornaments, etc can also be gifted.
Registration is mandatory in case of Gift of an immovable property but it is optional for
movable property. A letter by the donor drafted on a plain paper describing on making the Gift
and an acceptance letter from the donee showing his acceptance of the Gift received by him/her
will be sufficient. The Gift of movable property can be made by a registered deed or by mere
delivery of the property.

Taxation of Gift

According to Section 56 (2) (vii) of the Income Tax Act, 1961, a gift is not taxable if it is
received by an individual or Hindu undivided family from any relatives/blood relatives or as
inheritance or at the time of marriage or in contemplation of death. But in any other context, if
the aggregate of gifts received exceeds Rs 50,000 in a year, then the gift will be taxable as
income from other sources.

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ESSENTIALS OF A GIFT

The essentials of a valid gift are given below: 2

1) There must be transfer of ownership: As in case of a sale, there must be a transfer of

all the rights in the property by the donor to the done. It may, however, be noted that it

is permissible to make conditional gifts. The only restriction is that the condition must

not be repugnant to nay of the provisions of Section 10 to 34 of the Transfer of Property

Act, 1882.

2) The ownership must relate to a property in existence: Gift must be made of existing

movable or immovable property capable of being transferred. Future property cannot be

transferred. The share obtained after partition of the joint family property can be gifted.

Even a gift of property that obtained after a preliminary decree of partition is passed by

the court is valid.

3) The transfer must be without consideration: The word ‘consideration’ refers to

monetary consideration and does not include natural love and affection. If the

consideration is a nominal amount of money or the property is grossly undervalued yet

the transfer would not be a gift but a sale. In fact, the passing of money as a

consideration, howsoever small it may be, would destroy the nature of transfer as a gift.

Gifts in lieu of expectation of spiritual and moral benefit or a promise to look after the

donor in her old age or through our life are transactions without any consideration. A

transfer executed for consideration of a donee undertaking the liability of the donor is

not gratuitous, and not a gift.

4) It must have been made voluntarily: The offer to make the gift must be voluntary. A

gift therefore should be executed with free consent of the donor. This consent should be

untainted by force, fraud or undue influence. Mere relationship between the donor and

donee is not a conclusive fact of the exercise of undue influence and it must be proved

that the transaction is unconscionable.

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 5) The donor must be a competent person: Donor is the person who makes the gift. In a

transaction by way of gift the transferor is called a donor and he divests his ownership in

the property so as to vest it in the transferee, the done. The donor must be a sui juris. He

must have therefore attained the age of majority, possess a sound mind and should not

be otherwise disqualified. Section 7 of this Act provides that only such persons can

affect a transfer of property who is competent to contract. The result is, therefore, that a

minor cannot make a gift of his properties. According to Halsbury’s Laws of England3,

persons in fiduciary positions, e.g., trustees cannot make gifts of the property vested in

them on behalf of others unless they are authorised to do so.

6) The transferee must accept the gift: The gift must be accepted by the donee himself.

Acceptance can be validly given by a minor donee himself or by his mother or guardian

or by an agent is case of a deity. If the guardian gives the acceptance on behalf of the

minor the minor on attaining majority can either accept it or reject it. If a gift is made to

two or more persons, one of whom is capable of taking and the other is not, it has been

held that the former will take the whole of the property.4 Acceptance must be made

during the lifetime of the donor and while he is capable of giving. According to

Section 122 if the donee dies before the acceptance of gift the gift is void.

How to Revoke a Gift Deed?

According to Section 126 of the Transfer of Property Act, a Gift Deed can be revoked if it
fulfills the conditions below-

 there is an agreement between the donor and donee stating that the gift can be revoked
on the occurrence of a certain event
 such an event must not be based on the mere will of the donor
 the condition should not be illegal, immoral or repugnant to the estate created under the
Gift
 there must be a valid reason, based on which the Gift Deed may be rescinded as in
contracts
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A gift which is not based on fraud, cannot be cancelled unilaterally. Such a gift deed should be
resorted to a competent court of law to get any legal remedy, Kindly note that once a gifting
process is complete, it cannot be revoked.

Hence, it is always better to add a clause of revocation while executing a gift deed in order to
avoid future complications.

If you are planning on gifting your property to loved ones, then you should have a look at
LegalDesk’s ready to use format of Gift Deed online, which is user-friendly and time-saving
too. All you have to do is just fill up the blanks and place an order. Your Gift Deed will be
printed on Stamp Paper and home-delivered. Then you and your donee should sign the Gift
Deed and get it registered at the Sub-Registrar office of your jurisdiction.

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CONCLUSION

The conception of the term gift and subject matter of gift has been an age old and traditional
issue which has developed into a distinct facet in property law. The Transfer of Property Act,
1882 lays down all the rules, regulations and procedures relating to gift and how its transfer is
made. There are certain essentials of a gift like a must transfer of ownership, the ownership
must relate to a property in existence, the transfer must be without consideration, it must have
been made voluntarily, the donor must be a competent person and lastly the transferee must
accept the gift. The most important essential of the gift is its acceptance i.e. an acceptance of
gift must be made during the lifetime of the donor and while he is capable of giving.
According to s. 122 if the donee dies before the acceptance of gift the gift is void.

Also registration is necessary in all cases of gift of immovable properties and the title cannot
pass without there being a registered deed of gift. A gift is valid and complete on registration.
Also while dealing with the laws relating to gift we have come across important aspects
relating to gift like gift of existing and future property, when gift may be revoked, donation
mortis causa etc.

A deed of gift once executed and registered cannot be revoked, unless the mandatory
requirement of Section 126 of Transfer of Property Act, 1882 filled12 so in the end it can be
concluded fairly that Transfer of Property Act, 1882 and sections is a complete code dealing
with regulations of gift in India. Section 126 of the Transfer of Property Act, 1882 is very
clear and elaborative upon the manner in which gifts can be suspended or revoked, which is
of two ways:

(i) By mutual agreement, or,

(ii) By rescissions as contracts.

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 PART-II

SAMPLE OF A VALID GIFT DEED

Market value (50,00,000/-)

THIS DEED OF GIFT made on 1 of July, 2017, between: (1) Shri Atul s/o Atmaramji Kale;

aged about 44 years; Occupation: Government Service; (2) Smt. Pournima w/o Atul Kale; aged

about 38 years; Occupation: Household; AND (3) Miss Prabha d/o Atmaramji Kale; aged about

46 years; Occupation: Government Service; ALL No. 1 to 3 R/o: Plot No. 133, Saraswati Co-

operative Housing Society Layout, Rajendra Nagar, Raipur, hereinafter called as ‘the DONORS’

which expression shall unless repugnant to the contest or meaning thereof shall mean to include

their heirs, executors, administrators, representatives and assigns of the FIRST PART,

AND

Shri Anil s/o Atmaraji Kale; aged about 38 years; Occupation: Government Servant; R/o: 87,

Swawalambi Nagar, Raipur, hereinafter called as ‘the DONEE’, which expression shall unless

repugnant to the context or meaning thereof shall mean and include his heirs, executors,

administrators, representatives and assigns of the SECOND PART,

Whereas the donors herein are the absolute owner and possessor of the house building of the

property bearing house No. 1-2A, situated at Rajendra Nagar, Raipur- 493001, Chhattisgarh

state, consisting of a plinth area 0f 1200 Sft. Constructed on a total landed area of 300 Sq. yds.,

as being its individual owners having purchased the same vide registered Sale Deed No. 1212

dated 01-07-2017.

WITNESSES, that in consideration of natural love and affection which the DONORS had and

still have for the DONEE, the latter being the real younger brother of DONORS No. 1 & 3 and

the real brother-in-law of the DONOR No. 2, the DONORS do hereby and hereunder gifted the

property to him.

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NOW THIS GIFT DEED WITNESSES AS FOLLOWS:

1. In consideration of the natural love and affection of the donor for the donee, the donor hereby
transfers to the donee the said property, the estimated value of which is Rs. 50,00,000/- to the
donee to hold the same to the donee absolutely forever.
2. The donee has accepted this Gift and has taken the physical possession of the said property.
IN WITNESS WHERE OF, the donor gets and subscribes his signature and deliver in presence
of the witness.
SCHEDULE OF THE PROPERTY
All the part and parcel of house building property bearing municipal No. 1-2a, situated in
Rajendra Nagar, Raipur-493001, Chhattisgarh, consisting of a plinth area of 1200 sft.
Constructed on a total landed area of 300 Sq. yds. and bounded by-
North: Neighbour’s house bearing house no. 1-11
South: 30 feet public road
East: Neighbour’s house bearing house no.1-14
West: 15 feet public road
In witness whereof, the parties herein have put their hands and signed this deed of gift on the
day, month, year and place aftermentioned with their free will consent and without any coercion
or fraud in the presence of the following witnesses:
Date: 10-07-2017
Place: Raipur (Signature of Donor)
(Signature of Witness) DONOR
WITNESS 1: Purva Singh
House No. 74-A-2
Shankar Nagar
Raipur, Chhattisgarh
Pin no. 493001

(Signature of Witness)
WITNESS 2: Diksha Oraon
House No. 03 LHS
Tagore Nagar

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Raipur, Chhattisgarh
Pin no. 493001

BIBLIOGRAPHY

Books

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