Gift Deed in India: Registration, Stamp Duty, Tax, Gift to Minor and Revocation

What is a gift? - Section 122, Transfer of Property Act, 1882

A gift is the transfer of certain existing movable or immovable property, made voluntarily and without consideration, by one person called the donor to another called the donee, and accepted by or on behalf of the donee.

A gift must therefore involve an existing property, a competent donor, absence of consideration, a voluntary intention to transfer and valid acceptance.

When must the donee accept the gift?

Acceptance must be made during the lifetime of the donor and while the donor is still capable of giving. If the donee dies before acceptance, the gift is void. Acceptance may be express or may, depending on the facts, be inferred from conduct such as possession or acting upon the transfer.

Who are the donor and donee?

Is registration of a gift deed compulsory?

For immovable property: yes. Section 123 of the Transfer of Property Act requires the gift to be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. Section 17 of the Registration Act, 1908 separately makes instruments of gift of immovable property compulsorily registrable.

For movable property: section 123 permits the gift to be made either by a registered instrument or by delivery, depending on the property and applicable law. Accordingly, the earlier broad statement that every gift deed involving "property" must be registered is too wide.

Gift of property to a minor

A minor can be a donee. Since a minor is not competent to contract, acceptance is ordinarily made on the minor's behalf by a lawful guardian or other competent person. For a beneficial gift, acceptance on the minor's behalf can complete the gift subject to the facts and governing personal or guardianship law.

If the gift is onerous-that is, it carries a burden or obligation-the legal effect requires special care. Section 127 of the Transfer of Property Act contains specific rules for onerous gifts, including circumstances involving a donee who is not competent to contract.

Main clauses normally included in a gift deed

Stamp duty and registration fee on a gift deed

Stamp duty is governed principally by the applicable State stamp law and notifications. Rates differ substantially among States and Union Territories. Some jurisdictions provide concessional rates for gifts to specified relatives; others charge duty by reference to market value, circle value or another statutory valuation method.

Registration fee is also determined under the applicable State registration framework. Therefore, it is incorrect to state that gift-deed stamp duty is always the same as the duty on an ordinary sale or transfer. The current State schedule should be checked before execution.

Can a registered gift deed be cancelled or revoked?

A completed and accepted gift cannot ordinarily be cancelled merely because the donor later changes his or her mind. Section 126 of the Transfer of Property Act allows suspension or revocation in limited circumstances.

The donor and donee may agree that the gift will be suspended or revoked on the happening of a specified event that does not depend solely on the will of the donor. A clause making the gift revocable merely at the donor's will is invalid to that extent.

A gift may also be revoked on grounds on which a contract could be rescinded-for example, where legally established fraud, coercion, undue influence or similar vitiating circumstances exist. Apart from circumstances recognised by section 126 and other applicable law, a valid completed gift cannot simply be revoked unilaterally.

Tax on gifts from 1 April 2026 - Income-tax Act, 2025

For tax year 2026-27 and subsequent years, the relevant statutory framework is the Income-tax Act, 2025. Section 92(2)(m) covers specified receipts of money and property without consideration or for inadequate consideration.

Money received without consideration

If the total money received without consideration from persons not covered by an exemption exceeds ₹50,000 in the tax year, the whole amount may be taxable under the statutory rule.

Immovable property received as a gift

If immovable property is received without consideration and its stamp duty value exceeds ₹50,000, the stamp duty value is brought within the charging rule, unless an exclusion applies.

Immovable property bought for inadequate consideration

If the stamp duty value exceeds the consideration, the difference is relevant where that excess is more than the higher of ₹50,000 or 10% of the consideration.

Gifts from specified relatives

Section 92 excludes gifts received from a specified relative. For an individual, the definition includes the spouse; brother or sister; brother or sister of the spouse; brother or sister of either parent; lineal ascendants and descendants of the individual; lineal ascendants and descendants of the spouse; and the spouses of persons falling in the specified categories.

It is therefore more accurate to say that gifts from specified relatives are excluded from this gift-taxing provision. The expression "blood relatives" is not the statutory test and is both too narrow and potentially misleading.

Other important exclusions

Section 92 also contains exclusions for property or money received on the occasion of the individual's marriage, under a will or by inheritance, in contemplation of death, and in other specified circumstances. Each exception should be checked against the current statutory language.