Sruthi Kailas | Feb 9, 2014, 11:00AM IST | Magicbricks.com
Transfer of property often turns out to be a cumbersome process. More often than not, transfer of properties involves relatives. In such cases it is a gift deed that comes in handy and not a sales deed. So, what is a gift deed?
“Gift is the transfer of property from one person to another without consideration. Once gift deed is properly executed and registered it conveys all legal rights and ownership to the donee, i.e. to whom the gift is made and he or she becomes the absolute owner of the same. No one can claim ownership upon the same after execution and registration of the gift deed,” explains Asha Basu, partner, S Jalan & Company.
Thus, a gift deed comes in handy in several situations. For instance, a user on the consumer forum of Magicbricks.com wanted to know how he could transfer their house in his wife’s name so that the house tax can be levied in her name. Asha Basu suggests the use of a gift deed here. She says, “Execute a gift deed in favour of your wife and get it registered. After registration, apply for mutation and mutate the property in the name of your wife. After mutation, the property tax bill will come in name of your wife.”
Another user wanted to know the procedure involved in a gift deed if his father wanted to transfer his property in his son’s name. He further wanted to know if his father would have to travel to get the property registered in his name as the property was located in Maharashtra while his father resides in Bangalore.
The Magicbricks.com legal expert says, “As your father is gifting the property to you it can be gifted from anywhere. Consult an advocate to prepare a gift deed for the subject property. Mention the entire details of the property in the gift deed, and get the deed registered in the registrar’s office. At the time of transfer of the property, the said gift deed can be used as document for transfer of interest.”
A gift deed is one of the easiest ways to transfer property within family members. One of the biggest advantages of a gift deed is that there are no tax implications involved. However, Basu adds, that a gift deed that is not registered is bad in law. “Under Section 123 of the Transfer of Property Act, a gift of property, which is not registered, is bad in law and cannot pass any title to the donee. Gift deed has to be registered to make it valid.
Understanding the pros and cons of a gift deed can prove helpful in case of property transactions. However, one needs to be very careful while drafting these documents particularly as these are usually transactions between relatives and chances of fraud are high.
Sruthi Kailas is a keen market researcher and is currently a part of the content and research team of Magicbricks.com
Source : http://goo.gl/K0VcP7