Thursday 5 November 2015

FAQ ON GIFTING IMMOVABLE PROPERTY


Whether a gift of immovable property has to be made only by the donor or his authorized representative can also make a gift?
Section 123 of Transfer of Property Act 1882 defines the mode of making a Gift. It prescribes that, the gift should be made by a registered documents signed by the donor or on behalf of the donor by his authorised person, attested by at least two witnesses. So the authorized representative of the donor may also make a gift. But the authorization, that is power of attorney, given to the representative should be clear as to the provision for making a gift.

Whether gift made orally is valid?
The gift has to be made in writing and needs to be registered. But the personal law of Mohammedans permit oral gift (HIBA). Three important ingredients of Mohammadan gifts  are declaration of gift, acceptance of gift, and delivery of the possession of the gifted property. When claims of the oral gifts are made law calls for strict evidence to establish an oral gift and there must be some contemporaneous evidence of oral gift.

In case of gift made to two or more persons, if any one of them does not accept the gift, what would be the effect?
In such cases, where one of the donees does not accept the gift, the gift is not invalid completely. The gift becomes inoperative, void as to the interest which is not accepted by the donee. The other donee, who accepts the gift is entitled to what is gifted to him and he does not have any right, interest, title on the gift property which was not accepted by the  other donee.

When the donor has to give his acceptance of the gift?
The Transfer of Property Act stipulates that the acceptance has to be made during the lifetime of the donor and when the donor still capable of giving such gift. As such if the donor dies before acceptance, the gift is void. Similarly if the donor is dispossessed of the gifted property because of operation of law before acceptance, the gift is void. Likewise if the donor or donee becomes incompetent to contract before acceptance, the gift is void. As the gift deed needs to be registered acceptance of the gift is usually recorded on gift deed itself.

What are stamp duty and registration charges payable on gift deed? Is there any concession in case of gifts to family members?
Though there is no consideration received in the case of gift, it attracts stamp duty and registration charges as are applicable to a sale deed.
However, there is concession in respect of gift to family members (spouse, son, daughter, daughter-in-law and grand children, brothers and sisters). In Karnataka, in  these types of cases the maximum stamp duty payable is Rs. 1000/- and additional cess of Rs.50/- and infrastructure cess of Rs.20/- or Rs 30/-. The registration fee is Rs.50/-

Whether a gift can be suspended or revoked?
It depends on the contents and conditions of the gift deed. Both the donor and donee must agree for such condition. The relevant section is 126 of Transfer of Property Act. The gift may be cancelled or rescinded on the following grounds.
1. On occurrence of any event, specified in the gift deed that is, the event should be clearly described.
2. Both the parties should have accepted the conditions, the donee should have agreed for such condition while accepting the gift.
3. The proposed event, which suspends or revokes the gift should be beyond the control of the donor.
4. The condition so imposed must not be repugnant to the gift.
5. The condition should not be illegal or immoral.

Whether the Karta of a Hindu Undivided Family can contribute to the Prime Minister’s relief fund from out of the income of the joint family?
The Karta of Joint Hindu Family is empowered to utilize the joint family funds only for the benefits of the coparceners and for the family needs. As such, he is not empowered to utilize the family funds for contributing the same to the Prime Minister’s  relief  fund.

Whether the property received by the donee by virtue of a gift deed in his favour would be treated as his self-acquired property or the joint family property of the donee and his children?
The property received by the donee under a gift deed shall be treated as his self-acquired property and he can deal with the same according to his sweet will and none of his children can put forth any claim over such property.

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