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Elements 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 gift deeds.

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 possession.

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.

 
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