Overview of Gift deed registration in Chandigarh, Punjab
We all love to receive gifts. Gifts represent the mutual affection & respect among people for each other. But, to ensure their legal validity, it would be a good idea to create a gift deed and get it registered under the legal provisions, especially in cases where a person gifts any immovable property to the other party. The Gift of property involves transferring the ownership of one’s property to another person by executing a gift deed.
So, what is a gift deed in Chandigarh, Punjab? A gift deed is a legal instrument through which an owner of any property (immovable or movable property) effectuates the transfer of any gift to the person out of his own will without expecting or accepting any consideration in return. The owner making such a transfer is known as a Donor and the person accepting such a gift is known as a Donee.
Like a sale deed, the primary purpose of a gift deed is to enclose the details of the parties and the intention of the donor to gift the property to the donee. Executing a valid gift deed is evidence of the transfer of ownership and all rights associated with the property from the donor to the donee thus stating the Donee as an absolute owner of the property without any financial transaction.
Not only this, a gift deed is legally binding and is admissible as a piece of evidence before the Courts during a legal proceeding. Moreover, it affords legal protection to the parties in the event of any dispute that might arise in the future. Though there are generally no criteria for the eligibility to make a gift, only a natural person who has attained a majority could make a valid gift.
However, a minor is incompetent to transfer property as a gift since they are incompetent to enter a contract under the provisions of the Indian Contract Act 1872. However, they can accept gifts through their guardians who will act as managers of the property until the minor attains majority.
Punjab is located in northern India; it shares national borders with Himachal Pradesh, Haryana, Rajasthan, Chandigarh, and Jammu & Kashmir, and the international border with Pakistan. Punjab is the 19th largest state in area and the 16th largest state in population with 23 districts. Punjab’s official and widely spoken language is Punjabi; it is written in Gurmukhi script, and the major ethnic groups in Punjab are Sikh, Hindu, and Punjabis. The state shares its capital Chandigarh with the neighboring state Haryana.
It is named Punjab because the five tributary rivers (Sutlej, Beas, Ravi, Chenab, and Jhelum) of the Indus River flow in this state. The state has suffered from the dark scars of the holocaust during the partition in 1947. Punjab is the 9th highest-ranking state on the State Human Development Index. The sex ratio of Punjab is constantly declining, as the sex ratio of the state is 895 females per thousand males.
As Punjab has the most fertile land so, the economy of the state is highly dependent on agriculture. Punjab’s soil and climatic conditions are perfect for growing sugarcane, wheat, rice, fruits, and vegetables. Punjab’s economy has always been based on agriculture, but the state’s economy got a boost after the launch of the Green Revolution. The largest cultivated crop in Punjab is wheat, and Ferozepur and Fazilka districts are the largest producers of wheat and rice. Punjab is called the breadbasket of India because it has high wheat production. The state has recorded the lowest level of hunger in India, according to the Indian state hunger index. Besides agriculture, the other sources of economic development in Punjab are tourism, music, and the film industry.
Capital- Chandigarh
The startup ecosystem of Punjab
In the state’s startup ranking 2019 Punjab has been entitled as the aspiring leader. In 2017 the Punjab government officially launched its Industrial and business development policy. The motto of the Policy was to promote industrial development to nurture and grow the startup ecosystem. The 2017 Industrial Business Development policy aims to promote innovation and entrepreneurship spirit in the people of Punjab so that they can shift from job seekers to job creators.
To build a robust startup ecosystem, the state government has promoted networking of prominent academic institutions of higher education that carry out research and innovation along with other organizations operating incubators and accelerators. Following are the main objectives of the industrial and business development policy 2017: –
The policy aims to build a strong startup ecosystem and promote the entrepreneurship spirit in the people of Punjab, especially the young population.
Through the policy, the government of Punjab wants to promote private incubators and accelerators and facilitate funding mechanisms for entrepreneurs to nurture the startups.
The policy is framed to promote incubation centers by the government organization to build a robust startup ecosystem.
The government of Punjab is creating a common infrastructure in all the districts of Punjab. The infrastructure comprises the ready-to-use office spaces, research, and development testing laboratories, software, and hardware solutions; the Punjab government makes all these infrastructure changes to ensure a strong startup ecosystem.
The policy aims to promote sector-specific incubators and set up incubation centers in universities and other academic institutions of higher education.
The state government aims to give special attention to scheduling caste and women entrepreneurship to upgrade their socio-economic status through the policy.
Top business ideas in Punjab
Phulkari business
Phulkari’s work of Punjab is famous all around the world. Phulkari, in its literal sense, means flower work. Phulkari is a handmade embroidery on clothes, and it employs the women of Punjab particularly. By setting up a Phulkari business, you can employ the local women of Punjab, which means that you can find high-quality work with low payment. Phulkari business is a low investment business, and you can export your Phulkari products to the international markets to gain high profits.
Farm equipment lease
Not every farmer in Punjab can afford to have their farming equipment. So, setting up a Farm equipment lease business is a long-term profit-providing idea. To set up a farm equipment lease business, you need a lot of investment to buy modern technology, like tractors, threshers, sprayers, etc. Though this is a high investment business, it will help you make huge profits. You can lease your farming equipment hourly and maximize the return.
Seed store business
Usually, the producer sells the product to the customer, but what if I tell you that you can sell something to the producer. You can establish a seed store in Punjab, selling plant seeds, animal feed, fertilizers, and pesticides to the farmers. You can also link your store with online websites to expand your business. However, setting up a seed store needs considerable investment, but once it is established, it will make huge profits.
Dairy parlor business
Punjab is famous forits dairy products. Many customers love buying fresh milk, curd, and paneer. They prefer purchasing milk-related products from the local milkman rather than pasteurized packets. Especially the people of Punjab are way too health-conscious regarding dairy products. Lassi is the traditional drink of Punjab, and Punjabi people love milk and milk-related products. So, setting up a dairy farm in Punjab can make you earn huge profits. You can also sell your products online by establishing a website. If you don’t have enough milk or milk-related products to sell online, you can tie up with local milkmen to complete the demand.
Organic farming
Punjab has agricultural land where most farmers are engaged in agriculture and farming, mainly organic farming. Organic farming in Punjab is an excellent startup idea as you can directly send your organic vegetables and fruits to the market. The demand for organic vegetables and fruits is on the rise in the market. People nowadays do not mind paying extra money for organic products and food, so if you know about organic farming, setting up an organic grocery store and organic farming business is an excellent startup idea in Punjab. The organic farming startup is a low-investment and high-profit business. One can employ your land and sell theproducts to regional, national, and international markets. The only thing that is crucial and needs to be kept in mind is that one should avoid mediators or agents while selling their organic products as they consume a lot of commission. If you find growing and selling your organic products difficult, you can contact the small-scale farmers and sell organic products in partnership.
Essentials of a Gift Deed in Chandigarh, Punjab
The provisions related to the transfer of property are governed by the provisions of the Transfer of Property Act, 1882, which prescribes the essentials of a gift deed in Chandigarh, Punjab as provided below-
i. The gift should be made out of the free will and affection of the donor towards the donee in his lifetime. Further, the donee must accept the gift within his life for its legal validity.
ii. In case the gift is an immoveable property it must be attested and registered compulsorily.
iii. With a gift deed, the lawful owner of a property (donor) can transfer it to another party (done) without any monetary consideration.
iv. A gift deed must be executed out of love and affection towards the donee without any consideration in return.
v. The gift of immovable property will be effective when the gift deed is registered with the appropriate Registrar or Sub-Registrar. The gift of movable property is effective when the gift deed is registered or by delivery of the property. When the gift deed is registered, the transfer of the property from the donor to the donee takes place immediately, and the parties need not go to court for its execution.
vi. The donor must be a major at the time of transfer of property through gift deed;
vii. The subject of the gift (i.e. immovable property) must exist and should be free of any existing claim.
viii. The property should be registered under the provisions of the Indian Registration Act, 1908 to the sub-registrar having jurisdiction over the area of its location.
ix. The donor should be financially sound at the time of making the gift deed and should not intend to use it as a tool for tax evasion and illegal gains.
Gift Deed vs Will in Chandigarh, Punjab– What is the difference?
Gift Deed in Chandigarh, Punjab | Will in Chandigarh, Punjab |
A Gift Deed is a legal instrument affecting the transfer of an existing moveable or immoveable property made willingly without any consideration made by one person and accepted by or on behalf of another. | A Will is a solemn document through which the owner of the property entrusts his wealth & property or any certain wish to his successors. |
It is registered under the provisions of section 122 of the Transfer of Property Act 1882. | It is defined under sub-section (h) of section 2 of the Indian Succession Act, 1925. |
A gift deed should be executed during the lifetime of both donor and donee as the transfer materializes immediately in effect. | Will is effectuated only after the death of the owner of the property. |
A gift deed needs to be registered for its effectiveness as registration makes it lesser prone to litigation. | Will is prone to legal disputes & litigation. |
Once registered a Gift deed is irrevocable. | Will could be altered as many times as required. |
Which properties could be transferred through a Gift Deed in Chandigarh, Punjab?
Any movable or immovable property could be transferred through a gift deed by its lawful owner. However, the donor can only transfer properties that he holds lawfully at the time of execution of property and not any property he expects to receive ownership of in the future.
Immovable property has been defined under the Transfer of Property Act 1882, as either land or any direct benefits arising out of land or everything attached to the earth but does not include crops, grass, or standing timber. On the other hand, properties that do not come under the definition of immovable property are movable property.
What is the process of Registration of a Gift Deed in Chandigarh, Punjab?
As provided above, registration of the immovable property in Chandigarh, Punjab is mandatory under the Transfer of Property Act 1872. Section 123 of the Transfer of Property Act 1882 states that any gift of immovable property shall be valid only when it is registered through a gift deed signed by both the parties and attested by at least two witnesses. Provided below is the step-by-step process to register a gift deed under the provisions of the Indian Registration Act 1908-
i. Drafting the Gift Deed in Chandigarh, Punjab – The first step of registration of a gift deed is to draft a gift deed that could be drafted effectively by taking the support of a legal professional who would specify the name of the donor and the donee and other details. To ensure its validity, a gift must be made voluntarily without any consideration that should be stated in the deed.
ii. Acceptance of Gift in Chandigarh, Punjab – Next, the donee must have accepted the gift during the life of the donor. Any failure to communicate acceptance of the gift may render the gift invalid.
iii. Registration of the Gift Deed in Chandigarh, Punjab – Finally, it is mandatory to register a gift of immovable property (voluntary in other cases) to register a gift deed for effectuating its transfer. Further, it will also require attestation by at least two parties during the process of registration and post-registration.
- Next, the property subject to the gift deed must be assessed by an approved valuation professional at the office of the Sub-Registrar;
- Find out the applicable registration fee & stamp duty charges with the help of a professional lawyer or through the official state website. The stamp duty charges vary from state to state as the rates are comparatively lower for women applicants.
- Make a payment of the applicable charges and get the gift deed submitted to the District Sub-Registrar having jurisdiction over the location of the immovable property gifted.
- Finally, registration of the gift deed accompanied by the delivery of the deed with the property to the donee completes the process
What are the crucial clauses to be included in a Gift Deed in Chandigarh, Punjab?
i. Details of Parties – The gift deed must provide the names & other details such as name, address, and the relationship between the donor and donee including the intention of the donor.
ii. Consideration involved – The gift deed must state that the donor intends to transfer out of his free will and affection towards the donee and there is no consideration involved in the transaction.
iii. Voluntary Transfer – The gift deed should compulsorily mention that the donor is transferring the property and is doing so voluntarily without fear, coercion, or threat from the other party.
iv. The intention of Delivery – The gift deed should have the indication of the intention of the donor about delivery of the possession of the gift property, either expressly or impliedly.
v. Ownership of Property – A gift deed should describe the property including the fact that the property is in existence in present. The donor is the sole & absolute owner of the property and has delivered the possession of the gift property to the receiving property.
vi. Rights of the Parties – The gift deed should also prescribe the respective rights of the donor & donee in pursuance of the transfer such as taking proper care & periodical maintenance of the property, enjoying the property, or mortgaging the property.
vii. Acceptance by Donee – The gift deed should state that the donee has willingly accepted the gift of the property and has acquired ownership.
viii. Revocation – Though, it is not necessary to have a revocation clause, the parties may mutually decide whether or not the gift deed would be revocable to avoid any conflict in the future.
Documents Required for Registration of Gift Deed in Chandigarh, Punjab
- Copies of the proof of the identification of parties such as PAN, Aadhaar, Driving License, etc.
- Original documents related to the ownership of property.
- NOC, in cases where the property is agricultural land.
- Copy of affidavit affirming the legitimacy of the deed as regulated under section 22A of the Registration Act, 1908
What are the Tax Implications of Gift Deed in Chandigarh, Punjab?
Gifts of immovable property in Chandigarh, Punjab are taxable under section 56(2)(x) of the Income Tax Act, 1961. Therefore, sub-clause (a) to section 56(2)(x), whenever a person accepts a sum of money exceeding Rs.50,000 without any consideration in form of a gift, the whole sum will be taxed in the hands of the recipient under head ‘Income from other sources.
But, where a person accepts an immovable property without consideration as a gift and the value of stamp duty value of the gift deed exceeds Rs.50, 000, then an amount equal to the Stamp duty value shall be charged as tax from the donee.
However, there are certain exceptions to the taxability of gifts fulfilling which no tax shall be levied on the donee, which have been provided below-
- Where the gift has been received from any relative;
- The gift is received on some special occasions such as the marriage of the donee, or
- The gift is being received in pursuance of a will or through inheritance, or
- The gift is being received in contemplation of the death of the donor, or
- The gift is being received from a local authority as provided under the provisions of the
- If the gift is being received from any fund, university, foundation, other educational institution, other medical institution, hospital, trust, or institution as defined under the provisions of Section 10(23C) of the Income Tax Act,
- If the gift is being received from any trust or charitable university as provided under section 12A or 12AA, or
- If the gift is being received by a person from a private trust solely created for the benefit of the relative of the donee.
Can a gift deed be revoked in Chandigarh, Punjab?
Generally, once registered it is not possible to revoke a gift deed, but there is one exception to this rule. If the donor expressly reserves the right to revoke the deed under any specific circumstances or at any certain point of time and the donee accepts the gift with the condition, it could be revoked under the provisions of section 126 of the Transfer of Property Act, 1882.
Further, section 126 of the Act also specifies the ways of revocation of a gift, which includes-
i. Revocation by mutual agreement between parties in Chandigarh, Punjab.
ii. Revocation by rescission as a contract in Chandigarh, Punjab.
i. Revocation by mutual agreement in Chandigarh, Punjab
If the parties have agreed mutually to revoke the deed on happening at a certain event or a certain point in time, then the gift deed shall be revocable. However, to ensure its effect the conditions should be specified along with the fact that non-compliance with the conditions would lead to termination of the agreement and the donor may revoke the deed.
Even if the parties fail to mention the condition in the deed but state the condition in a separate mutual agreement which must be part of the transaction of the gift. In such cases, the condition shall be valid and legally enforceable.
However, one of the parties should not call for the revocation of the deed unless the same was based on any fraud, misrepresentation, undue influence, or the property being an onerous one unilaterally. Even if the gift was received due to the before-mentioned reasons, the onus of proving such fraud or misrepresentation, undue influence, or was onerous shall be on the person who challenges the Gift Deed.
ii. Revocation by the cancellation of contract in Chandigarh, Punjab
The very basis of the creation of the gift deed is based on the fact that the gift should be made out of the free will of the donor and not due to any coercion or undue influence. Thus, if the donor could prove that there was no free consent towards making the gift, the gift deed will be revoked by the cancellation of the contract. In other words, a gift deed should be in the nature of an express or implied contract, under which an offer is made by the donor and accepted by the donee. If the contract itself is withdrawn or revoked by one part, there seems no question of a transfer of property taking place under the gift deed.
However, one of the parties should not call for the revocation of the deed unless the same was based on any fraud, misrepresentation, undue influence, or the property being an onerous one unilaterally. Even if the gift was received due to the before-mentioned reasons, the onus of proving such fraud or misrepresentation, undue influence, or was onerous shall be on the person who challenges the Gift Deed.
Conclusion of Gift deed registration in Chandigarh, Punjab
Consequently, the subject matter of gift & drafting a gift deed has been in existence for ages and it has been governed under the rules, regulations, and procedures regarding the Gift lay down in the Transfer of Property Act, 1882. For an effective transfer all the conditions i.e. transfer of certain existing moveable or immoveable property made out of the free will of the donor and without any consideration in return. The donor must be legally competent to effectuate the transfer of property through a gift deed in the lifetime of the donee, otherwise, it would become void in effect. A gift deed must be registered and duly stamped in the office of the sub-registrar. Finally, a deed of the gift once executed and registered, shall not be revoked unless the lifetime of the donee.