The deed must be registered
A gift of immovable property is made by a registered deed signed by the donor and attested by two witnesses (section 123 of the Transfer of Property Act). The person receiving it must accept the gift during the donor's lifetime. An unregistered gift deed does not transfer the property (section 17 of the Registration Act).
Stamp duty
Stamp duty on a gift deed is set by each state. Many states charge a much lower rate, or a flat amount, when the gift is to a close family member such as a spouse, child or grandchild. Check the state's current rule before drafting.
Income tax
Property received as a gift from a relative, as defined in section 56(2)(x) (spouse, siblings, parents, children and their spouses, among others), is not taxed. From anyone else, its stamp duty value is taxed as income if it is more than ₹50,000.
When the person who received the gift later sells it, the cost and the holding period of the previous owner carry over for working out capital gains.
After registration
Apply for mutation in the municipal and, for land, the revenue records, and transfer the society membership. A gift, once accepted and registered, can be revoked only on grounds the deed itself sets out or that would void a contract.
Common questions
Is a gift deed better than a will?
A gift deed transfers the property now and is hard to undo; a will takes effect only on death and can be changed. Which suits depends on the family; a lawyer can advise.
Sources
- Transfer of Property Act, 1882: sections 122–126
- Registration Act, 1908: section 17
- Income Tax Act, 1961: sections 49 and 56(2)(x)
- State stamp acts for the duty on gift deeds
Last checked 2026-10-01.