Overview of Gift deed registration in Mumbai, Maharashtra
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 Mumbai, Maharashtra? 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.
Maharashtra is a state located in the western peninsula region of India and occupies a substantial portion of the Deccan Plateau. It is India’s second-most populous state, formed on 1st May 1916 by splitting the bilingual Bombay state into Maharashtra and Gujarat. In total, Maharashtra is divided into six divisions and 36 districts, and Mumbai is the capital of Maharashtra. In terms of area, Maharashtra is the third-largest city, bordered by the Arabian Sea, Karnataka, Goa, Telangana, Chhattisgarh, Gujarat, and Madhya Pradesh, and the union territory of Dadar and Nagar Haveli & Daman and Diu.
Maharashtra consists of three international airports: Chhatrapati Shivaji Maharaj International Airport in Mumbai, Dr. Babasaheb Ambedkar International Airport in Nagpur, and Pune airport. Besides this, the state also has four UNESCO World Heritage Sites – Ajanta, Ellora, Elephanta Caves, and the Chhatrapati Shivaji Maharaj Terminus.
Mumbai is the commercial and financial capital of the state. Maharashtra is among the most industrialized states in India and plays a significant role in developing the country’s social and political life. The oldest city in Asia is also located in Mumbai. Maharashtra is the largest contributor to the national economy and is counted among India’s most developed states. Maharashtra holds the largest economy in India, and the service sector is the dominating sector of Maharashtra’s economy.
Capital- Mumbai
The startup ecosystem of Maharashtra
In 2018 the State Government of Maharashtra launched its startup policy called the ‘Maharashtra State Innovative Startup Policy’ to boost the entrepreneurship spirit in Maharashtra. The startup policy of Maharashtra aims to target economic growth and generate employment by encouraging entrepreneurs to design more job opportunities. The startup policy of Maharashtra focuses on biotechnology, artificial intelligence, clean energy, etc. The State Government of Maharashtra aims to build robust incubation and a seed funding mechanism to create a supportive startup ecosystem in the state. The objectives of the startup policy of Maharashtra are as follows: –
Through the startup policy, the state government wants to provide a platform to nurture the entrepreneurial aspiration among the citizen, especially the youth of Maharashtra.
The policy aims to empower startups to contribute significantly to the state’s economy and create employment opportunities for different sections of society.
By designing the startup policy, the government of Maharashtra visions to develop a strong infrastructure with the purpose of easing the regulatory framework to spur the development of the startup ecosystem.
Business ideas in Maharashtra
Maharashtra is counted among the hub of many best industries, and the state is known for its mouthwatering cuisine, beautiful beaches, hills, and rich culture. The financial capital of India, Mumbai, is also located in Maharashtra. Mumbai is a top contributor not only to the state economy but also to the Indian economy. Mumbai is called the ‘City of Dreams’ because many people come to Mumbai with the dream of getting several job opportunities. The state offers employment and job opportunities to a huge section of society. The startup ecosystem of Maharashtra is robust and supportive of the growth of small businesses. If you are thinking of starting a small business in Maharashtra, then below are some best Startup ideas in Maharashtra: –
Dance studio
People come to Mumbai, ‘the city of dreams,’ to get casted in movies. The entertainment industry of Mumbai is one of the top contributors to the state’s economy. The entertainment industry of Maharashtra, particularly Mumbai, consists of actors, dancers, musicians, directors, makeup artists, fashion designers, camera operators, and many more. Those who aspire to become an actor wants to learn dance. Opening a dance academy will be the best business option in Maharashtra if you have a dance background.
Mumbai is the hub of one of the top entertainment Industries called the ‘Bollywood Industry.’ A lot of people around the globe come to Mumbai with a motive to try their luck in the entertainment industry. You need a significant amount of money to open a dance academy in Maharashtra and hire professional and skilled dancers of different dance forms to teach students. Initially, this business will require a lot of effort and energy, but once it is established, it will help you make huge profits.
Textile business
Maharashtra is counted among the largest textile manufacturing states in the country, and cities like Solapur, Bhiwandi, and Malegaon are famous for textile mills. The state offers enormous opportunities to start a textile business. Maharashtra has excellent retail and wholesale textile markets and manufacturers, so it is easy as well as profitable to open a textile business in Maharashtra. For setting up a textile business, you will not require a lot of investment as it is a low-investment business.
Organic stores
The state is counted among the largest agricultural states in India. With growing consciousness towards health, the demand for organic fruits and vegetables is rising day by day. People are trying to change their eating habits and lifestyle and switch to a healthy and environment-friendly lifestyle. They are continuously searching for organic fruits and products and never mind spending some extra penny for organic products. So, setting up organic fruits and products business is a very good idea.
With an increase in the demand for organic fruits, vegetables, and products around the country, the scope of organic farming and related business is also expanding. If you belong from an agricultural background and have some knowledge of organic farming, then you should try your hands at the organic fruits, vegetables, and products business.
Fast food stalls
The Maharashtrian Street food is famous among domestic as well as foreign tourists. The most prominent street food of Maharashtra is vada pav. Besides vada pav, Maharashtra’s other famous street foods are misal pav poha and pav Bhaji. The fast-food business in Maharashtra will help you in yielding huge profits. Maharashtra, particularly Mumbai is full of crowds, so to start a fast-food business, you need to arrange adequate space near railway stations, markets, colleges, schools, etc., to attract the people to your food stall. You can also connect your fast-food business with online delivery companies like Swiggy and Zomato to expand your business. The fast-food stall is a low-investment business and can help you profit considerably.
Essentials of a Gift Deed in Mumbai, Maharashtra
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 Mumbai, Maharashtra 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 Mumbai, Maharashtra– What is the difference?
Gift Deed in Mumbai, Maharashtra | Will in Mumbai, Maharashtra |
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 Mumbai, Maharashtra?
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 Mumbai, Maharashtra?
As provided above, registration of the immovable property in Mumbai, Maharashtra 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 Mumbai, Maharashtra – 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 Mumbai, Maharashtra – 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 Mumbai, Maharashtra – 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 Mumbai, Maharashtra?
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 Mumbai, Maharashtra
- 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 Mumbai, Maharashtra?
Gifts of immovable property in Mumbai, Maharashtra 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 Mumbai, Maharashtra?
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 Mumbai, Maharashtra.
ii. Revocation by rescission as a contract in Mumbai, Maharashtra.
i. Revocation by mutual agreement in Mumbai, Maharashtra
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 Mumbai, Maharashtra
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 Mumbai, Maharashtra
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.