Gift deed registration in Hyderabad, Telangana – charges, process, documents

Overview of Gift deed registration in Hyderabad, Telangana

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 Hyderabad, Telangana? 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.

Situated on the South-Central stretch of the Indian peninsula on the high Deccan Plateau, Telangana is a state in India. The state was carved out on 2 June 2014 from Andhra Pradesh and its capital is Hyderabad. The state is bordered by Chhattisgarh, Karnataka, Maharashtra, and Andhra Pradesh. In 1948 the state’s capital Hyderabad joined the Union of India, followed by an Indian military invasion, and in 1956 Telangana was merged with Telugu-speaking Andhra State to form Andhra Pradesh. Finally, on 2 June 2014, the state was granted statehood under the leadership of K. Chandrasekhar Rao after a prolonged peasant-driven moment.
Telangana has the 7th largest economy and 6th highest GSDP in India. In the State Human Development Index, Telangana stands in 22nd rank. In a few decades, the state has emerged as strong Information Technology (IT) Software industry and services sector. Besides this, Telangana is home to the major administrative centers of research labs like Indian Defence Aerospace, Defence Research and Development Organisation (DRDO), Bharat Dynamics Limited, Defence Research, and Development Laboratory, and Defence Metallurgical Research Laboratory. The state’s official language is Telegu, followed by Urdu as the second official language. As per the 2011 census, the major religion followed in the state is Hinduism, followed by Islam and Christianity.

Economy of Telangana
The economy of Telangana is agriculture driven. The state uses Godavari and Krishna rivers and other rain-fed water sources for irrigation. Rice is the staple crop, and other crops grown in Telangana are sugarcane, tobacco, mango, and cotton. Telangana is counted among India’s top IT exporting states and has 68 special economic zones. Besides agriculture, Telangana is also rich in minerals and has several coal and diamond reserves. Industries are the other sector that provides a boost to the economy of Telangana. Hyderabad is the hub of several manufacturing and service industries. After agriculture and industries, tourism is also an important component of the Telangana economy. The state has various UNESCO World Heritage Sites and various tourist attractions like forts, waterfalls, forests, temples, monuments, and historical places. The department responsible for promoting tourism in Telangana is Telangana State Tourism Development Corporation (TSTDC).

Capital- Hyderabad

The startup ecosystem in Telangana
Telangana has secured rank in the top 10 global ecosystems in affordable talent and the top 15 global ecosystems in Asian ecosystems. The startup ecosystem of India is on the rise, with Telangana at the forefront of the growth. The growth of the Telangana startup ecosystem is driven by strong infrastructure, proactive state government policies, and exceptional talent. The state aspires to build a world-class innovation ecosystem through a mix of passionate and supportive government policy, high-quality talent, and access to capital. Undoubtedly, the state has a strong startup ecosystem; until now, the state has registered over 6,500 startups, including four unicorns and several small-scale businesses. To build a robust startup ecosystem, the Telangana government has launched various policies like Emerging Technologies, Telangana Academy for Skill and Knowledge, T-Hub, Telangana State Innovation Cell, T-Works, and We-Hub.

Top business ideas in Telangana
Livestock farming business
Livestock farming like rearing goats, cows, and hens is a good business idea in Telangana because the state has an agrarian economy. Agriculture and livestock farming go hand in hand, and it can be a good startup idea if you have considerable knowledge of caring for cows, goats, and hens.

Fruits and vegetable export business
Agriculture is a huge part of Telangana’s economy, so setting up a vegetable and fruit export business will help you make a huge profit. The state has an agricultural economy, and the demand for fruits and vegetables remains high in all seasons. You can start exporting fruits and vegetables from Telangana to other states to meet the demand. To successfully establish the export business, you need to be a good negotiator, and you should be able to identify good quality fruits and vegetables. To gain huge profits and make it a long-term business, you can do partnerships and contracts with local farmers.

Tourism business
Telangana has many beautiful waterfalls, temples, forts, monuments, forests, and historical places that attract the attention of many national and international tourists. You can start a tourism-related business-like, a transport business, a restaurant, a tourist agency, etc. To establish a tourism business, you must follow the guidelines of Telangana state Tourism Development Corporation. This business requires limited capital investment.

Poultry farming business
If you have limited resources and investment, you should try poultry farming. The only necessity required for establishing a poultry farm business is good knowledge and care for small chickens. For some days, you need to take care of small chickens, and then you can sell them off to the wholesalers to make a profit. You need to put a lot of energy and be patient during the initial days of the poultry farming business because returns on investment take time. The poultry farm business will help you get dual-earnings from eggs and meat.

Essentials of a Gift Deed in Hyderabad, Telangana

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 Hyderabad, Telangana 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 Hyderabad, Telangana– What is the difference?

Which properties could be transferred through a Gift Deed in Hyderabad, Telangana?

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 Hyderabad, Telangana?

As provided above, registration of the immovable property in Hyderabad, Telangana 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 Hyderabad, Telangana – 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 Hyderabad, Telangana – 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 Hyderabad, Telangana – 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 Hyderabad, Telangana?

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 Hyderabad, Telangana

• 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 Hyderabad, Telangana?

Gifts of immovable property in Hyderabad, Telangana 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 Hyderabad, Telangana?

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 Hyderabad, Telangana.

ii. Revocation by rescission as a contract in Hyderabad, Telangana.

i. Revocation by mutual agreement in Hyderabad, Telangana

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 Hyderabad, Telangana

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 Hyderabad, Telangana

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.