Gift deed registration in Chennai, Tamil Nadu – charges, process, documents

Overview of Gift deed registration in Chennai, Tamil Nadu

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 Chennai, Tamil Nadu? 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.

Tamil Nadu is popularly known as the ‘Land of Temples.’ It consists of more than 33,000 ancient and historical temples that are certainly built collectively through the Dravidian style of architecture. The state is located in the southern part of the Indian Peninsula. 26th January is celebrated as the Formation Day of Tamil Nadu. Tamil Nadu is the 10th largest in terms of area and the 6th largest in terms of population. Tamil Nadu shares its boundaries with Puducherry (Indian union territory) in the east, Kerala in the west, and Karnataka and Andhra Pradesh in the North, and also shares an international maritime border with Sri Lanka. This state provides shelter to the Tamil people andthe Tamil language is one of the oldest and longest-existing classical languages in the world. Demographically, this Tamil language is majorly spoken in the state and is also the official language of the state. As per the 2011 census, around 88% of the population of Tamil Nadu is Hinduism.
Tamil Nadu has all flavors of the tourist attraction. This state is a historically privileged home of various ancient and medieval pilgrimage sites. It has gigantic mountains in the Western Ghats, exhilarating waterfalls, flourishing and dense vegetation, enchanting beaches, impressive monuments, several sacred temples imprinted on the sculptures with the blend of the Dravidian Architecture, fabulous wildlife, etc. Tamil Nadu has numerous scenic spots, elegant scenarios, rich cultural heritage spots with a touch of spiritual essence, and unaffected and impressive diversity. Tamil Nadu consists of 5 UNESCO (United Nations Educational, Scientific and Cultural Organization) world heritage sites they are Mamallapuram Monuments, Thanjavur Brihadeeswarar Temple, Gangaikonda Cholapuram Brihadeeswarar Temple, Darasuram Airavatheeswarar Temple, and Nilgiri Mountain Railway.
The climate of Tamil Nadu state has mostly witnessed monsoon fails and thereby, later on, leads to droughts-prone areas when the monsoon failed. Tamil Nadu state consists of a wide range of national parks, wildlife sanctuaries, and biosphere reserves such as – the Sathyamangalam Tiger Reserve (the largest elephant population in India), Gulf of Mannar Biosphere Reserve (specialized in seaweed seagrass, coral reefs, salt marshes, and mangrove forests), Agasthyamala Biosphere Reserve, Anamalai and Mudumalai National Park and many more. The wildlife sanctuaries and biosphere reservesaim to protect the natural habitat and provide a favorable ecosystem for the endangered species. As per the latest survey, India has a human development index of 0.619, in which the contribution of Tamil Nadu state is 0.736 which is the highest among all the states in the country. Tamil Nadu is among the most literate state in India with a literacy rate of 80.33 percent. In the Economy of Tamil Nadu, the contribution of the agriculture sector plays a crucial role. Tamil Nadu is the leading producer of agricultural products and Tamil Nadu is the fifth largest producer of rice in India.

Capital- Chennai

Top Business Ideas in Tamil Nadu
Vanakkam! If you are thinking to start a business in Tamil Nadu? It is the best place to start a business. Here are some of the amazing business ideas in Tamil Nadu. As we know that Tamilnadu is India’s sixth-largest state, it is located at the southernmost tip of the country. It has a rich cultural heritage and mouth-watering South Indian cuisine. The state also has a rich agriculture sector. The Tamil Nadu State exhibits high economic liveliness and with a high Human Development index (with a literacy rate of around 80%), a good infrastructure, highly attractivewhich is the best in Asia, and it is also India’s leading and innovative knowledge hub. This provides a golden opportunity for entrepreneurs and investors to work on unique ideas for their businesses. Let’s check out the top business ideas available in Tamil Nadu: –

Poultry farming business
Poultry farming is one of the most profitable and cost-effectivebusinesses in Tamil Nadu. If you are thinking to start a small-scale business in Tamil Nadu then this is the best niche to start. In spite of the poultry farming appears to be a lucrativebusiness, but still many people fail because of a devoid of proper enterprise knowledge and business idea. Hence to receive the high returns with less small-scale investment, first, it is been strongly recommended to have a fair and standard knowledge of poultry farming business setup before starting the business. Bakery business
In the past few years, it has been witnessed that there is a consistent increase in the demand for bakery products in Tamil Nadu. Starting with the Bakery business is one of the best business ideas at present in Tamil Nadu. If you do like enjoying the baking stuff and have proper knowledge in this field. Then you should start the business with very small capital investment and you can expand it over time by promoting it. You need to provide the best possible stuffto the customer. However, starting a bakery business is getting more popular these days. It is because it needs very less initial investment. If your Bakery products satisfy the customer then sooner or later your business going to generate enough income.

Startup Ecosystem in Tamil Nadu
The Tamil Nadu state has been at the front line of the economic development of our country. Entrepreneurship and technological advancement with innovation has provided the perfect platform for the state. Hence to boost the existing potential of the Tamil Nadu state, the state government has launched a unique startup policy in 2018. The main motto of this policy is to turn Tamil Nadu into a global innovation hub and the most tested and preferred spot for startups and business ideas. However, The policy is valid only for a period of 5 years from 2018 to 2023. The main purpose of the startup and innovation policy of Tamil Nadu is to provide an enabling atmosphere to the investors, and entrepreneurs for the startup in the state. The main objective of this policy is to partner with the different educational institutions and investors to promote the startup ecosystem. They also care to provide incentives and necessary resources to the startups with mentoring and investing guiding mechanisms. They also focus on reducing the existing tax burden on the startups. Apart from this, they have decided to foster the growth of at least 5000 startups in the state.

Essentials of a Gift Deed in Chennai, Tamil Nadu

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 Chennai, Tamil Nadu 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 Chennai, Tamil Nadu– What is the difference?

Which properties could be transferred through a Gift Deed in Chennai, Tamil Nadu?

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 Chennai, Tamil Nadu?

As provided above, registration of the immovable property in Chennai, Tamil Nadu 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 Chennai, Tamil Nadu – 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 Chennai, Tamil Nadu – 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 Chennai, Tamil Nadu – 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 Chennai, Tamil Nadu?

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 Chennai, Tamil Nadu

• 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 Chennai, Tamil Nadu?

Gifts of immovable property in Chennai, Tamil Nadu 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 Chennai, Tamil Nadu?

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 Chennai, Tamil Nadu.

ii. Revocation by rescission as a contract in Chennai, Tamil Nadu.

i. Revocation by mutual agreement in Chennai, Tamil Nadu

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 Chennai, Tamil Nadu

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 Chennai, Tamil Nadu

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.