Gift Deed in India: How to Gift Property, Stamp Duty, Registration, Tax, and Can a Gift Be Revoked?

Quick Answer: A gift of property in India is governed by Sections 122 to 129 of the Transfer of Property Act, 1882 (TPA). A gift is a voluntary transfer of existing property without any payment, and it must be accepted by the donee during the donor's lifetime. A gift of immovable property (land, house, flat) is valid only if made by a registered gift deed, signed by the donor and attested by at least two witnesses (Section 123). Stamp duty is set by each state, and many states charge a reduced rate for gifts to close family members. Once a gift is complete, the donor cannot cancel it at will. It can be revoked only in limited cases: a condition agreed in the deed, fraud, coercion or undue influence, or, for senior citizens, failure of the donee to look after them where the gift was conditional on care, under Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.

Parents often gift a flat to a child, a husband gifts property to his wife, or grandparents transfer land to grandchildren during their lifetime. A gift deed is a simple and popular way to do this, but small mistakes in drafting, registration or acceptance can make the gift void, or lead to bitter disputes later. This guide explains how a gift deed works, what it costs, the tax position, and when a gift can be challenged.

What Is a Gift Under Indian Law?

Under Section 122 of the TPA, a gift is the transfer of certain existing movable or immovable property, made voluntarily and without consideration, by one person (the donor) to another (the donee), and accepted by or on behalf of the donee.

So a valid gift has five essentials:

1. Existing property: You cannot gift property you may acquire in the future. Under Section 124, a gift of both existing and future property is void as to the future property.
2. Transfer of ownership: The donor must part with ownership, not just possession.
3. Voluntary: Free consent, without force, fraud or undue influence.
4. Without consideration: If any money or benefit is taken in return, it is a sale or exchange, not a gift.
5. Acceptance during the donor's lifetime, and while the donor is still capable of giving. If the donee dies before accepting, the gift is void.

Who can make a gift?

The donor must be a major of sound mind and the owner of the property, competent to contract. A minor cannot make a gift. However, a gift can be made to a minor, and accepted by the minor's guardian on their behalf.

Registration and Formalities (Section 123)

• Immovable property: The gift must be made by a registered instrument, signed by or on behalf of the donor, and attested by at least two witnesses. This applies regardless of the property's value. An unregistered gift deed of immovable property does not transfer ownership.
• Movable property (jewellery, shares, money, a car): The gift can be made either by a registered instrument or simply by delivery of the property.

Acceptance can be express or implied. The donee usually signs the gift deed to show acceptance, but acceptance can also be shown by conduct, such as taking possession or applying for mutation. In Renikuntla Rajamma v. K. Sarwanamma (2014), the Supreme Court held that a registered gift deed is valid even if the donor keeps the right to live in or use the property during their lifetime. Delivery of possession is not essential for a gift of immovable property under the TPA, as long as the registered deed is executed and accepted.

Gift Deed vs Will vs Sale Deed

A gift deed suits someone who is sure they want to transfer the property now. A will suits someone who wants to keep control and flexibility until death. See our guide on how to draft a valid will for the alternative.

Step-by-Step Process to Register a Gift Deed

1. Check the title. Confirm the donor is the absolute owner. Get the title deed, encumbrance certificate, latest property tax receipts, and mutation records. If the property is jointly owned, all co-owners must join, or only the donor's share can be gifted.
2. Find the market value. Check the government guideline value (circle rate or ready reckoner rate) for the property, which is the basis for stamp duty.
3. Draft the gift deed. It should include the full names and addresses of donor and donee, their relationship, a full description of the property with boundaries, a clear statement that the gift is made voluntarily and without consideration, any conditions (such as a life interest for the donor), the donee's acceptance, and the witness details.
4. Pay stamp duty. Pay through e-stamping or the state's online portal.
5. Book an appointment at the Sub-Registrar's office where the property is located, usually online.
6. Execute and register. The donor, the donee and two witnesses appear with original ID proofs (Aadhaar, PAN) and photographs. The Sub-Registrar records signatures, thumb impressions and photos, and registers the deed. Registration must happen within four months of execution under the Registration Act, 1908.
7. Collect the registered deed and apply for mutation in municipal and revenue records in the donee's name. Also update the society's share certificate for a flat.

Stamp Duty on Gift Deeds

Stamp duty is a state subject, so rates vary widely. A few general patterns:

• For gifts to unrelated persons, most states charge stamp duty at or close to the rate applicable to a sale, on the market value.
• For gifts to close family members, such as a spouse, children, grandchildren, parents or siblings, many states charge a concessional rate or a fixed amount. For example, Maharashtra charges a nominal fixed duty for residential or agricultural property gifted to a spouse, child, grandchild, or the spouse of a deceased child, and several other states have similar concessions.
• Some states give an additional concession where the donee is a woman.
• Registration fees are charged in addition, usually around 1% of the value, subject to caps in some states.

Always check the current rate in your state's Stamp Act and notifications before executing the deed, since these change frequently.

Income Tax on Gifts

Under Indian income tax law, gifts received by an individual, whether money or property, are taxable in the hands of the recipient as "income from other sources" if their total value exceeds ₹50,000 in a year, unless an exemption applies. This rule was in Section 56(2)(x) of the Income-tax Act, 1961, and the Income-tax Act, 2025, which replaced it from 1 April 2026, carries forward the same approach. The key exemptions are:

• Gifts from relatives, including a spouse, brother or sister, the spouse's brother or sister, the parents' brothers or sisters, any lineal ascendant or descendant (parents, grandparents, children, grandchildren), and the spouses of these persons.
• Gifts received on the occasion of marriage.
• Gifts received by will or inheritance, or in contemplation of the donor's death.

Other tax points to keep in mind:

• Clubbing of income: If you gift property to your spouse or son's wife without adequate consideration, income from that property, such as rent, is generally added to your own income for tax.
• Capital gains on later sale: When the donee later sells the gifted property, the previous owner's cost and holding period are taken into account to compute capital gains.
• The donor does not pay capital gains tax on making a gift, as a gift is not treated as a "transfer" for capital gains purposes.

Tax rules and section numbers have changed with the new Act, so confirm the current position with a chartered accountant before making a large gift.

Can a Gift Deed Be Revoked or Cancelled?

This is the most common question. The short answer: a completed gift cannot be cancelled simply because the donor changes their mind. A donor cannot unilaterally execute a "cancellation deed" to undo a registered gift. Revocation is possible only in the following situations.

1. By a condition in the deed (Section 126)

The donor and donee can agree that the gift will be suspended or revoked on a specified event that does not depend on the donor's will alone. For example, a gift may be revoked if the donee sells the property within a certain period. A clause allowing the donor to revoke at their own pleasure is void.

2. Fraud, coercion, undue influence or misrepresentation (Section 126)

A gift can be set aside on any ground on which a contract could be rescinded, such as fraud, coercion, undue influence or misrepresentation. The donor must file a suit for cancellation under Section 31 of the Specific Relief Act, 1963, generally within three years of learning the facts entitling them to cancellation (Article 59 of the Limitation Act). Gifts by elderly, ill or dependent persons to someone in a position of trust are examined closely for undue influence.

3. Senior citizens: Section 23 of the Senior Citizens Act, 2007

If a senior citizen transfers property by gift or otherwise, subject to the condition that the transferee will provide basic amenities and physical needs, and the transferee refuses or fails to do so, the transfer is deemed to have been made by fraud, coercion or undue influence. The Maintenance Tribunal can then declare it void.

In Sudesh Chhikara v. Ramti Devi (2022), the Supreme Court said two conditions must be shown: the transfer was made subject to the condition of providing basic amenities and needs, and the transferee failed to provide them. In Urmila Dixit v. Sunil Sharan Dixit (2025), the Court took a more liberal, beneficial approach, upheld the cancellation of a gift deed where the son failed to care for his parents, and noted that the Act must be interpreted to advance its welfare purpose. To be safe, a parent gifting property to a child should write the maintenance condition expressly into the gift deed. See our guide on the Senior Citizens Maintenance Act for more.

4. Onerous gifts (Section 127)

If a gift carries an obligation, such as property with a loan attached, the donee who accepts the benefit must also accept the burden. A donee cannot accept only the beneficial part of a single gift and reject the burden.

Gifts Under Muslim Law (Hiba)

Section 129 of the TPA says the gift provisions of Chapter VII do not affect the rules of Muslim personal law. A Muslim gift, or hiba, is valid if there is a declaration of the gift by the donor, acceptance by the donee, and delivery of possession, actual or constructive. A hiba can be made orally. In Hafeeza Bibi v. Shaikh Farid (2011), the Supreme Court held that a hiba does not become invalid merely because it is in writing, and a written memorandum of an oral hiba does not need registration. Even so, recording and registering the gift is advisable to avoid later disputes and to complete mutation.

Common Mistakes to Avoid

• Not registering the gift deed of immovable property, which makes the transfer ineffective.
• Gifting property the donor does not fully own, such as a share in undivided family property, without checking whether it can be gifted.
• Vague property descriptions without boundaries, survey numbers or flat numbers.
• Not recording acceptance by the donee.
• Calling a transfer a "gift" while taking money, which can be treated as a sale and attract full stamp duty, or be challenged.
• Parents not including a maintenance condition when gifting their only home to a child.
• Forgetting mutation after registration.

Frequently Asked Questions

Is a gift deed valid without registration?

For immovable property, no. Section 123 of the TPA requires a registered instrument. For movable property, delivery is enough. Muslim hiba follows its own rules.

Can a donor keep living in the gifted house?

Yes. The donor can reserve a life interest or the right of residence in the deed. The gift remains valid, and the donee becomes the full owner subject to that right.

Can a gift deed be challenged after the donor's death?

Yes, by legal heirs, typically on grounds of fraud, undue influence, lack of mental capacity, or forgery. Clear drafting, independent witnesses, and medical evidence of the donor's capacity, where the donor is very old or ill, help defend the gift.

Does a daughter have a claim on property her father gifted to her brother?

If the property was the father's self-acquired property, he was free to gift it to anyone, and the daughter generally cannot claim a share in it. If it was coparcenary property, the father could not gift away the shares of other coparceners, including the daughter after 2005. See our post on partition of property for more on this distinction.

Can a gift be made to a minor?

Yes. The guardian accepts the gift on the minor's behalf. The minor becomes the owner, although dealings with the property while the child is a minor are subject to guardianship law.

Is there a gift tax in India?

There is no separate gift tax now, but gifts above ₹50,000 from non-relatives are taxed as income in the hands of the recipient. Gifts between the specified relatives are exempt.

Conclusion

A gift deed is a clean, immediate way to transfer property to family members while you are alive, often with low stamp duty and no income tax for relatives. But it is also close to irreversible. Before signing, make sure the gift is truly what you want, the property title is clear, the deed is registered, and, if you are a parent or grandparent depending on the donee's care, that a clear maintenance condition is written into the deed. A well-drafted gift deed prevents the very family disputes it is meant to avoid.

Disclaimer: This article is for general information and educational purposes only. It does not constitute legal or tax advice and does not create a lawyer–client relationship. Stamp duty rates, registration fees and tax provisions differ between states and change from time to time. Please consult a qualified advocate and chartered accountant for advice specific to your situation. As per Bar Council of India rules, this content is not intended as advertisement or solicitation.