Gifting of a house property in India has certain income tax and stamp duty implications. Stamp duty on gift deeds in India varies from state to state. Stamp duty on gift deeds can vary from 2% to 7% based on the property value. However, stamp duty charges are waived by many states when gift is given to relatives connected by blood.
Gift deed stamp duty in 2024
| State where gift deed is registered | Stamp duty as percentage of the property value |
| UP | Rs 5,000 for property exchange among blood relatives
5% for others |
| Haryana | 5% |
| Delhi | 4% |
| Maharashtra | 3% |
| Gujarat | 3.5% |
| Rajasthan | 6% |
| Madhya Pradesh | 5% |
| Andhra Pradesh | 2% |
| Himachal Pradesh | 6% |
| Tamil Nadu | 7% |
| Karnataka | 5% |
| Punjab | 6% |
| Bihar | 5.7% (for women) and 6% (for men) |
| Jharkhand | 3% |
| Kerala | 2% |
| Madhya Pradesh | 2.5% |
| Chhattisgarh | 5% |
| Uttarakhand | 5% |
| Himachal Pradesh | 5-6% |
| Odisha | 3% |
| Telangana | 0.5 % (subject to a minimum of Rs 1,000 and maximum of Rs 10,000 |
| J&K | 3-7% |
| Assam | 5.6% |
| Chandigarh | 5% |
| Goa | 3%-6% |
| Manipur | 7% |
| Sikkim | 1% |
| Arunachal Pradesh | 6% |
Gift deed registration charges
Just like most deeds related to exchange of property, gift deed registration charge is also applicable, to make this instrument legally binding. While some states charge 1% of the property cost as gift deed registration charges, other charge a standard fee.
| State | Registration fee as percentage of property value |
| UP | 1% |
| Haryana | 1% |
| Delhi | 1% |
| Maharashtra | 1% |
| Gujarat | 1% |
| Rajasthan | 1% |
| Madhya Pradesh | 1% |
| Andhra Pradesh | 1% |
| Himachal Pradesh | 1% |
| Tamil Nadu | 1% |
| Karnataka | 1% |
| Punjab | 1% |
| Bihar | 1% |
| Jharkhand | 1% |
| Kerala | 1% |
| Madhya Pradesh | 1% |
| Chhattisgarh | 1% |
| Uttarakhand | 1% |
| Himachal Pradesh | 1% |
| Odisha | 1% |
| Telangana | 1% |
| J&K | 1% |
| Assam | 1% |
| Chandigarh | 1% |
| Goa | 1% |
| Manipur | 1% |
| Sikkim | 1% |
| Arunachal Pradesh | 1% |
See also: Property registration online process and charges in India
Gift deed stamp duty calculator
A percentage of the property value has to be paid as the stamp duty on gift deed registrations in a state. In UP, for example, the receiver of the gift has to pay 2% of the gift value as the stamp duty. Supposing the stated value of a property that is being gifted is Rs 1 crore. Then, the person receiving it would have to pay Rs 2 lakh as stamp duty on the gift deed.
Who pays the stamp duty on gift deed?
The giver of the gift pays the stamp duty and other associated charges at the time of registration of the deed. In other words, the responsibility to pay the stamp duty and registration fee in case of a gift deed lies on the giver and not the receiver. Since any payment from the receiver of the gift would amount to paying money to the owner and bring the transaction into the area of a ‘sale’ under the provisions of the Transfer of Property Act, the doner pays the stamp duty and registration fee on gift deeds.
What property can be gifted?
A property has to meet with the following requirements to be become a gift under Indian laws:
- The property must a movable or an immovable property.
- The property must be transferable.
- The property should not be a future property.
- The property should be tangible.
Legal requirements for gift deed
Registering a gift deed is mandatory
Under the provisions of the Transfer of Property Act, the transfer of a house property as a gift, has to be backed by a registered instrument or document, signed by or on behalf of the person gifting the property and it should also be attested by at least two eyewitnesses. This means, one cannot simply decide to gift a property and do so without completing the legal procedure, if they intent to make the transaction legally binding.
Just like in the case of sale deeds, a gift deed must also be registered in the sub-registrar’s office, following the due procedure.
Stamp duty, registration charge must be paid
The registrar shall ensure that proper gift deed stamp duty has been affixed on the document when it is presented for registration. The amount of stamp duty and registration charges payable, with respect to a gift deed, are generally the same as in the case of a regular sale.
Stamp duty on gift deed in blood relation
If the gift deed is executed between some specified close relatives and family members, some states in India provide concessions in stamp duty. For example, Maharashtra has a cap on stamp duty payable on gift of a residential or agricultural property to one’s spouse, children, grandchildren or wife of a son who has died, at Rs 200, irrespective of the value of the property.
The Uttar Pradesh government has fixed the stamp duty on such gift deeds at Rs 5,000. “Such gift deed, whereby the donor transfers immovable property in favour of family members such as son, daughter, father, mother, husband, wife, daughter-in-law, real brother (his wife in case of death of real brother), real sister, son-in-law, son/daughter of son/daughter, the maximum stamp duty will be Rs 5,000,” a notification issued by UP government principal secretary Leena Johri read. An additional processing Rs 1,000 have to be paid as the processing free along with the Rs 5,000 stamp duty.
Gift comes into effect immediately
Owners gifting their property must be mindful of the fact that as soon as the gift deed is registered, the owner loses his ownership over the gifted property. This is to say, the provisions of the gift deed, just like a sale or a relinquishment deed, come into effect immediately. This is not true in case of a Will, the provisions of which come into force only after the creator of the Will passes away.
However, do take note that a gift deed takes effect, only upon the payment of the requisite stamp duty.
Income tax on gift deed
According to income tax laws, the value of all the gifts received by a person during a year is fully exempt, as long as the total of such gifts does not exceed Rs 50,000 in a year. If the value of all the gifts taken together exceeds Rs 50,000, the aggregate of the gifts received become taxable without any threshold exemption. However, income tax laws also give a favourable treatment to gifts between two close relatives. Consequently, the gift of any asset (movable or immovable) made to certain specified relatives is fully exempt from tax in the hand of the recipient without any upper limit. The list of close relatives includes parents, spouse, siblings, siblings of the spouse, lineal ascendants and descendants of the person and his/her spouse. The list also includes spouse of the abovementioned persons.
If the house property is received as a gift from a relative, the first incidence of tax will arise, when you sell the property. The cost for the purpose of income tax, shall be the taken as the cost that was paid for the property by any of the previous owners. The profits shall be treated as short-term or long-term, depending on whether the aggregate of your holding period as well as that of the previous owner who had actually paid for it, is more than 36 months or not.
If the holding period as computed above is less than 36 months, the profit accrued on the sale of such property, shall be treated as short-term and will be added to your regular income and taxed at the applicable slab rate. However, if the holding period is more than 36 months, you will get the benefit of indexation on the cost of the property, as well as the option to claim exemption from payment of 20% long-term capital gains tax, by investing in a residential house or in capital gains bonds of Rural Electrification Corporation (REC) or National Highway Authority of India (NHAI).
Can you take back your gifted property?
One can take back a gift but this aspect must be considered and covered in the registered gift deed. Under Section 126 of the Transfer of Property Act, revoking the deal will not be possible, unless the donor specifies in the registered contract that he keeps with himself the rights to take back the gift.
This means that at the time of drafting the gift deed, the donor has to clearly mention that even after the gift deed is executed, the donor will still hold the right to revoke the gift deed and take back the gift from the donee, if and when he wishes to do so.
See also: Applicability of TDS on property transfer under Section 194IA
Conditions to revoke a gift deed
The following are the steps for revoking a gift deed:
- It is important to have a clause or understanding between the donor and the recipient under the circumstances the gift deed can be revoked. This can be a failure or any particular incident.
- The condition for revoking the gift deed should be accepted by the recipient while receiving the gift and it should not be based on the will of the donor alone.
- Any gift that was not based on a fraud activity cannot be unilaterally revoked. In such cases the donor and the recipient need to move to the court for revoking it.
See also: All about carpet area
Key points to remember about gift deeds
Gift to people other than relatives: Under the Indian laws, gifts between non-relatives are not acknowledged as legal. This assumption is based on the premise that the owner would charge a consideration from someone who is not known to them. In any case, the deed will have to be registered as a sale deed.
Retraction of gift: To retract a gift deed, the donor will have to prove that he was duped or forced to execute the deed. There is no other way to take back a gifted property.
See also: Can gift deed be revoked
Gifts received in marriage: Gifts that are received from relatives on the occasion of a marriage, through the execution of a will or inheritance, are not taxed.
Gift validity: A gift deed is valid if it is duly executed and the transferor is the absolute legal owner of the property. Another condition for the gift deed to be valid, is that no orders of courts should prevent such a transfer.
Tax liability on gift deeds: The tax liability does not arise on gift deeds, for someone who has received the same on the occasion of marriage, or by way of inheritance, or from a local authority. The same is also true for gifts received from a foundation, trusts, educational institutions, medical institutions, etc.
Some other tips to execute a gift deed
- In case you are gifting a movable property, it is not mandatory to execute a gift deed.
- In the gift deed, do mention that you are making the transfer out of natural love and affection for the donnee.
- Ideally, you should also mention the reason for making the gift in the gift deed. The reason could be for the general welfare or the person.
- At the time of registration of the gift deed, you also have to submit the proof of acceptance of the gift by the donee.
- Consult your family members before executing a gift deed. Taking them on board is necessary, to avoid future legal hassles.
See also: All about property registration laws in India
Gift deed myths
You can gift your property as you like: You can only gift your self-acquired property of which you are the sole owner. Any shared property cannot be gifted. This is particularly true of ancestral property.
Since it is a gift, there cannot be any tax implications: The receiver of the gift will have to pay taxes on high-value gifts. Since all properties are invariably high value gifts, stamp duty implications will arise.
Anyone can gift a property: Only a person who is in an absolutely mentally and emotionally fit condition can gift a property. Otherwise, the gift deed will become null and void.
See also: All about mutation of property
News Updates
Stamp duty on gift deed can’t be based on market value: HC
On gift deed, stamp duty can only be levied based on a property’s value and not its market value, the Allahabad High Court has ruled. While giving its order, the HC said that Section 47-A (3) of the Indian Stamp Act cannot be invoked where the property has been transferred by way of gift deed.
Section 47-A (3) of the Indian Stamp Act talks about the procedure to be dealt with undervalued instruments. “The Collector shall after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner, as may be prescribed, determine the market value of the property, which is the subject matter of such instrument and the duty as aforesaid and the difference, if any, in the amount of duty shall be payable by the person liable to pay the duty,” it reads.
UP law allows Rs 5,000 stamp duty on property transfers among blood relatives
February 10, 2024: In Uttar Pradesh, property transfers among blood relatives will attract a standard stamp duty of Rs 5,000 only after the UP Legislative Assembly passed a Bill in this regard. The Indian Stamp (Uttar Pradesh Amendment) Bill-2024— which has a provision that the transfer of a property between blood relatives can be done by paying a stamp duty of Rs 5,000 — was passed with the Uttar Pradesh Assembly on February 9. An additional processing Rs 1,000 have to be paid as the processing free along with the Rs 5,000 stamp duty.
Goa to extend lower stamp duty on gift deed to nephews, nieces, in-law
The Goa government has given an approval to an amendment to the Indian Stamp (Goa second amendment bill) 2023 to add nephews, nieces, son-in-law, sister-in-law as family members. In 2021, the state reduced the stamp duty on gift deeds made in favour of family members to Rs 5,000. This benefit was so far available only to father, mother, brother, sister, wife, husband, daughter, son, grandson and granddaughter.
Conditions must be met for senior citizens to declare gift deed void: HC
A gift deed executed by a senior citizen can be declared null and void if the document mentions the receiver of the gift is liable to take care of the senior citizen in turn, the Karnataka High Court has ruled in the case Nanjappa and State of Karnataka & Others.
“The (gift deed) document does not contain any stipulation that the donee is under the obligation to the appellant. In the absence of any condition stipulated in the documents, the provisions of Subsections (1) and (2) of Section 23 of the Senior Citizens Act are no applied,” the HC said while delivering its judgment on an appeal filed by one Nanjappa.
Sub-section (1) of Section 23 of the Senior Citizens Act says any kind of property transfers, by way of gift or otherwise, could be declared null and void following certain conditions.
FAQs
What is a Gift Deed?
Gift Deed is a document that transfers property to another owner as a gift. A Gift Deed is valid only when it is without any consideration in return by one family member/ friend to another. It is mandatory to register Gift Deed, according to Section 17 of the Registration Act, 1908.
How to make Gift Deed for property?
As per the Transfer of Property Act, the transfer of a house property under a gift, has to be effected by a registered instrument/document, signed by or on behalf of the person gifting the property and should also be attested by at least two witnesses.
Can you challenge a Gift Deed?
A gift deed can be challenged in court on the basis of its legality, subject to the law of limitation and proof of its illegality. It can be challenged under the following grounds: 1. If the gift deed did not follow legal requirements and was not registered accordingly. 2. If there were certain conditions for the gift that were not fulfilled by the receiver. 3. If either of the parties of the gift deed are incompetent for the contract.
Who can give Gift Deed?
The owner of an immovable property can gift it to a relative or a third person. A gift is considered valid only if it is made voluntarily and without consideration.
How can a lawyer help in gift deeds?
A lawyer is responsible for the documentation and handling of gift deeds. A gift deed is a legal document that can be executed only under the guidance of a lawyer. Thus, the lawyer helps in drafting and registering of the gift deed and also ensures that all the legal requirements are fulfilled in this process.
What is the stamp duty for father to son gift deed?
f the gift deed is executed between some specified close relatives, some states provide concessions in stamp duty. For example, Maharashtra has a cap on stamp duty payable on gift of a residential or agricultural property to one’s spouse, children, grandchildren or wife of a son who has died, at Rs 200, irrespective of the value of the property.
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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