Thursday, February 18, 2016

GIFT OF IMMOVABLE PROPERTY

GIFT OF IMMOVABLE PROPERTY


It is our Indian Tradition to bestow gifts of immovable properties within families. This process of "GIFT" is covered under Section 123 of Transfer of Property Act 1882, which delineates the procedures of making a valid gift.
The Act stipulates that the gift should be made by a registered document signed by the donor, or by his Attorney on behalf of the donor, and attested by at least two witnesses. This enables the donee or his duly authorized representative to receive and accept the gift. The authorization or the Power of Attorney given to the Representative, should be clear as to the provisions either for making a gift or to receive/accept the gift, and should invariably be stamped as per the applicable Laws in vogue. The gift should be executed in writing and be registered.
Gift to two or more persons:
There may be instances where- in the gift is given to two or more persons and anyone among them may not accept it. In such cases, though the gift is not completely invalid, it becomes inoperative and void as to the interest which was not accepted by the concerned donee. The other one who has / have accepted the gift is / are entitled to what is gifted to him / them. The donee who accepted the gift do not get any right, interest and title on the other property which was not accepted / refused by the other donee. Only the extent of proportion gifted will only belong to them and the unaccepted portion reverts to the donor and not the donees.
Gift becoming void :
The acceptance of gift has to be made during the life time of the donor and when the donor is still capable of giving, asserts the Transfer of Property Act. As the gift deed needs to be registered, acceptance of the gift is usually recorded on the gift deed itself. The gift becomes void if the donor dies before acceptance by the donee, or the donor is dispossessed of the gifted property by virtue of Law before acceptance, or in the event of either the donor or the donee becoming incompetent to contract before giving or acceptance of gift.
Gift that is revoked:
At times, depending on the contents and conditions of the gift deed, a gift can also be suspended or revoked. Both the donor and the donee must agree for such act. Broadly, the following are the grounds on which a gift may either be cancelled or rescinded:
- On occurrence of any event that is specified in the gift deed;
- The conditions should have been accepted by both the parties and the donee should have agreed for such condition while accepting the gift;
- The proposed event, by which the gift got suspended or revoked, should be beyond the control and will of the donor;
- The condition so imposed must not be repugnant to the gift;
- The condition should not be illegal or immoral.
The fundamental aspect while making a gift is the absence of any kind of consideration. Though no consideration is received on gift, yet the gift deed attracts stamp duty and registration charges as applicable to a sale deed. However, a concession is given in respect of the gift to family members like spouse, son, daughter, daughter-in-law and grand-children. In Karnataka the maximum stamp duty payable is Rs.1000/- with an additional cess of Rs.50/- plus infrastructure cess, education cess, etc. The registration fee in such cases is Rs.500/-.
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