Everything You need to Know about Gifting a Property

Gifting property is not new, but there is financial and tax implication that one must be aware of before gifting a property. We discuss everything that you need to know about transferring the property through a gift deed.

Tax implication of the gifted property

If you are transferring the property through a gift deed, then neither you nor the receiver is liable to pay any tax. Though one will have to pay the registration charges and stamp duty at the time of registration.

Every state has a different stamp duty for gift deed. If husband if gifting his wife the property, then there is no stamp duty involved. If you are gifting the property to any other relative, then the stamp duty of 2.55 is applicable.

If you are gifting your property to someone who is not related to you, the receiver will have to pay the tax during that financial year under the head income from other sources.

Gifting cash from the sale of the property

If you are gifting the cash from the sales of the property to your relative, then they are not liable to pay any tax. If the recipient is not related to you, then they will have to pay the tax for the gift under the head income for that financial year.

Gifting your assets through your lifetime

If you have decided to part with your assets by gifting them then keep in mind that the gifting deed shall be done during your lifetime in the presence of two witnesses. The ownership of the gifted property is legal only when you have paid the stamp duty for the transaction of the property.

Taking back the gift

Unless it is mentioned in the gift deed that the owner reserves the right of revoking the gift, the gift can be revoked. Otherwise, the gift deed cannot be undone.

Gifting after demise

If you want to gift someone your property after your demise, then it must be clearly stated in your will. The property transaction will not take place through the gift deed but as a transfer property. All the conditions regarding the same must be mentioned in your will.

Gifting to a charitable institute

Every state has different laws regarding the gifted property for the charitable organisation. If you are gifting the property to an NGO, then you are not liable to pay any stamp duty. Keep in mind that NGO is allowed to receive the gift of land and property.

Denying the gift

The recipient must accept the gift during the lifetime of the donor. If not, then the contract turns void, and the gift remains with the donor.

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