of gifting property
Gift is the transfer of certain existing
moveable property by one person to another, wherein the transfer
is voluntarily and without consideration. The donee must accept
the property from the donor. In case the donee dies before
acceptance, the gift is void.
Elements of gift deed
However, there are certain points to kept in mind while gifting/drafting
According to Section 122 of the Transfer of Property Act,
the essential elements of a gift are: transfer of property,
movable property, and absence of consideration, by donor to
donee, subject matter of transfer, and acceptance.
There cannot be a ‘gift’ without giving or taking,
which are two contemporaneous and reciprocal acts that constitute
a gift. In order to constitute a valid gift, the pivotal requirement
is acceptance thereof. No particular mode of acceptance is
required but fact of acceptance can be established by different
circumstances such as donee taking a property or being in
possession of deed of gift alone. If the donor handles over
a document of gift to him after its execution or registration
in favour of donee, it amounts to a valid acceptance of gift.
Rules for minors
Any person who is sui juris can make a gift of his property
and be a donor. A minor, being incompetent to contract, is incompetent
to transfer, thus a gift by the minor would be void. A natural
guardian can accept a gift, on behalf of a minor, containing
a condition that the person nominated in the gift deed shall
act as a manager of the gifted property. Such acceptance would
amount to recognition by the natural guardian of the natural
guardian of the nominated person as the manager or the agent
of minor for the purchase of such property.
Qualification for gifting
Soundness of mind and majority are important qualifications
required for making a gift, and person must make a gift with
his free consent to be valid. A minor can be a donee or receptor
of the gift. But if the gift is onerous, the obligation cannot
be enforced against him while he is a minor. Bu when he attains
majority he must either accept or return the gift may be accepted
by or on behalf of the donee, who can also be a minor; but the
donee must be an ascertainable person.
Items as gifts
The subject matter of the gift must exist movable or immovable
property, and can be land, goods, or actionable claims. It
must be transferable but it cannot be future property. In
order to constitue a valid gift, there must be an existing
and tangible property. There must be a voluntary transfer
of property to another made gratuitously and without consideration.
A gift is a transfer without any element of consideration
and complete absence of monetary consideration is the main
hallmark. Where there is any equivalent of benefit measured
in terms of money in respect of a gift, the transaction ceases
to be a gift. Love, affection, spiritual benefit and may enter
in the intertion of the donor to make a gift.
Even when registered instruments make a gift, the same has
to be accepted by or on behalf of the donee to make it complete,
failing which the gift will be bad. Law requires acceptance
of the gift after its execution, though the deed may not be
registered. The acceptance may be signified by an overt act
such as the actual taking of possession of the property, or
such acts by the donee as would in law amount to taking possession
of the property, where the property is not capable of physical
Delivery of possession is an essential condition for an
essential condition for the validity of the gift. However,
it is not necessary that in every case there shold be a physical
delivery of possession. Possession the delivery of which would
complete a gift may be either actual or constructive. But
the donor should divest himself completely of all ownership
and dominion over the subject of the gift.
Gifting immovable property
Under Section 123 of Transfer of Property Act, a gift of
immovable property, which is not registered, is bad in law
and cannot pass any title to the donee. All documents should
be stamped with appropriate non-judicial stamp and be registered
as required under the India Registration Act. Mere delivery
of possession without a written instrument cannot confer any
title as a registered instrument can only make a gift of immovable
property. A deed cannot be dispensed with even for a property
of small value and attention by two witnesses is required.
This provision excludes every other mode of transfer and even
if the intended donee is put in possession, a gift of immovable
property is invalid without a registered instrument.
Revoking of gifts
Section 126 of the Transfer of Property Act provides that
a gift may be revoked if the following conditions are satisfied
- the donor and donee must have agree that the gift shall
be suspended or revovked on the happening of a specified event;
such event must be one which dose not depend upon the donor’s
will; the donor and donee must have agreed to the condition
at the time of accepting the gift; and the condition should
not be illegal, or immoral and should not be repugnant to
the estate created under the gift.
A clause in the gift deed totally prohibiting alienation
is void. A gift, which was not based on fraud, undue influence
or misrepresentation, and was an onerous one, cannot be cancelled
unilaterally. Such a gift deed can be cancelled only by resorting
to legal remedy in a competent court of law.