Gift deed registration in Kolkata, West Bengal – charges, process, documents

Overview of Gift deed registration in Kolkata, West Bengal

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 Kolkata, West Bengal? 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.

West Bengal is prominently known as the city of joy for its elated personification of culture, enthralling love, hidden mystery, and mouthwatering sweet delicacies. It is located along the Bay of Bengal in the eastern part of the country. This state shares the international boundary with Nepal and Bhutan in the north, Bangladesh in the east, and national boundaries with Odisha in the South-west, Jharkhand in the West, and Bihar in the North-West, Sikkim in the North, and Assam in the North-East. West Bengal is 4th in terms of population and 13th in terms of area in India. The state’s capital is Kolkata, the 3rd largest metropolitical city and the 7th largest in terms of population in India. As per the demographics, Bengalis are the main ethnic group comprising most of the population. There are many languages spoken in this region, but among them, majorly spoken languages are Bengali and English.
West Bengal possesses two world heritage sites and is the country’s 7th most visited tourist destination. This state owns a peerless and diverse geographical division with numerous natural assets, stretching from the Darjeeling mountains of the Himalayans north to the Gangetic plain south. The state shares the ultimate rhythm from exquisite and quiet beaches of the coastal plain to the world’s largest Delta(Sunderbans), which is also known for providing a natural abode for the scarce wild species of Royal Bengal Tigers. This state is known for its traits in unfolded and untold mysteries, rich cultural heritage architecture with the blend of fine arts and embroidery, brilliant folk festivals, traditional customs and rituals, delicious cuisines, and many pleased specialties about this magical land. This state has the ultimate vision to form the home of legendary freedom fighters, sinners, saints, poets, and many others concentrated as the cultural and intellectual hub since pre-colonial times.
The economy of West Bengal is based on agricultural production and small and medium-sized business models. The proportion of Agricultural land in Bihar state is the highest among all Indian states, and this state significantly contributes to India’s Rice harvest. After the economic stagnation for years, in 2020-21, the economy of West Bengal is the 6th largest in the country in terms of gross state domestic product (GSDP). It has India’s 20th highest GSDP per capita. West Bengal state has the 28th highest ranking among the Indian States on Human Development Index. Other service sectors such as trade, finance, insurance, and other related activities have also shown significant growth in the past few years.
Capital- Kolkata

Top Business Idea in West Bengal
As per the study and statistics performed in 2015-16, West Bengal is the 6th largest state (around 140.56 billion USD) that majorly contributes to the Indian economy’s GDP. This state has immense potential in the field of startup vision. Also, the state facilitates robust connectivity to the rest of India by making it one of the most demanding and lucrative platforms for initiating a profitable and productive business. Given below are the list of a top business idea that can bring a change to the realm of the business ecosystem:-

Quick Service Restaurant Business
People of this region of India are real food lovers as the recent study and research show that there is considerable growth in the number of fast-food lovers among the people living in the urban towns and cities of West Bengal. As per the region’s requirement, you should set up or buy a franchise of famous and reputed fast-food brands such as Chickblast, Kathi Junction, KFC, Dominos, etc., in the venture of the pertaining industry.

Florist shop Business
The flower-selling business has seen credible growth in the past few years, especially in West Bengal. However, there are mainly two reasons. The first reason is an increase in the purchasing power of the young generation and the second reason is citizens of this state are religiously hyped. Merely all the festivals in west Bengal are celebrated with pomp and joy, but the inclusion of flowers can fulfill the main essence of the celebrations. Companies like Ferns and Petals, Floralis, etc., offer franchise opportunities in West Bengal. Thereby building a profitable and cost-effective business idea with an optimistic future.

Diagnostic Center Business
A person who has an experience in the field of laboratory science can establish or set up a diagnostic center business idea with a considerable capital amount. These Diagnostic Center business with pathology is one of the most productive and lucrative businesses in the field of medicine and the pharms industry. The awareness of the physician and the increase in the patient’s requirements to take high-quality care services in West Bengal have increased the demand for the best quality diagnostic center. Many companies like Apollo, Thyrocare, etc., are offering franchise opportunities for the investors as per the ease of doing business.

The startup ecosystem in West Bengal
Startups have entered every expected corner of the country. Hence, by breaking many cultural biases and helping the economy to grow. The government of West Bengal has come up with an initiative to facilitate the startup to access the various required resources of the Startup Eco-System in the state. The Startup Bengal initiative majorly assists in stimulating an entrepreneurial environment in the state. The main objective of this initiative is to create an enabling environment to inspire the youth of this state and encourage them to engage with all stakeholders and investors of the Startup to strengthen the start-ups.
A comprehensive startup initiative will support the startups at all stages. These entrepreneurship programs must be added to the curriculum or syllabus of the educational institutions to foster youth to come up with new innovative business ideas. In the past few years, this state has set an example in building an environment that consistently registers new organizations throughout the state. Creating a vibrant and proper framework, including coaching by using the existing business associations like the Indian Institute of Management (IIM) Calcutta, Indian Institute of Technology (IIT) Kharagpur, Council of Scientific and Industrial Research (CSIR) labs in West Bengal, etc., thus the entrepreneurs and investors are the crucial assets as they are an essential tool for economic development and creating job opportunities throughout the state.

Essentials of a Gift Deed in Kolkata, West Bengal

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 Kolkata, West Bengal 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 Kolkata, West Bengal– What is the difference?

Which properties could be transferred through a Gift Deed in Kolkata, West Bengal?

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 Kolkata, West Bengal?

As provided above, registration of the immovable property in Kolkata, West Bengal 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 Kolkata, West Bengal – 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 Kolkata, West Bengal – 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 Kolkata, West Bengal – 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 Kolkata, West Bengal?

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 Kolkata, West Bengal

• 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 Kolkata, West Bengal?

Gifts of immovable property in Kolkata, West Bengal 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 Kolkata, West Bengal?

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 Kolkata, West Bengal.

ii. Revocation by rescission as a contract in Kolkata, West Bengal.

i. Revocation by mutual agreement in Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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.