Thinking of gifting property to your loved ones? To give a child a little something extra, or to thank your parent for their time and love, giving a property to loved ones through a Gift Deed is the most endearing way to show love and care.
But, before you get started embodying that love, it is essential to know the stamp duty on a gift deed, a critical step that legitimizes your intention to gift the property and renders your act legally valid and binding.
In India, a Gift Deed is not only a procedural necessity. It is a legal document recognized under the Transfer of Property Act, 1882. Furthermore, the correct stamp duty on the gift will be paid, so your rights of ownership remain protected.
A Gift Deed is a legal document that enables the voluntary transfer of property ownership without receiving any compensation in return. It allows you to gift your property to someone else - typically a family member - such as your spouse, parents, or children.
Unlike a Sale Deed, where money changes hands, a Gift Deed is a no-consideration transfer. A Gift Deed is also different from a Will, which only takes effect when the person writing the Will passes away, whereas a Gift Deed is valid immediately upon execution and registration.
To effectuate the transfer, you must register the Gift Deed at the sub-registrar's office and pay the requisite gift deed registration fees and stamp duty on the gift deed.
Think of stamp duty as a fee charged by the government to confirm the transfer of your ownership in the eyes of the law. Without paying stamp duty, your deed of gift stamp duty document carries no legal authority at all.
Stamp duty also:
What is interesting is that gifting property and stamp duty rules vary by state and to whom you give the property.
Here’s a quick look at how the gift of property stamp duty differs across major Indian states. Notice how blood relation gifts often enjoy big concessions!
| State | Gift to Family Members | Gift to Non-Family Members | Registration Charges |
|---|---|---|---|
| Tamil Nadu | 1% of market value | 7% of market value | 1% |
| Maharashtra | ₹200 (fixed) | 3% of market value | 1% |
| Delhi | Nil (for blood relations) | 3% | 1% |
| Karnataka | ₹1,000 (family) | 5% | 1% |
Pro Tip: In some states, female recipients enjoy lower property gift deed charges as part of women's empowerment schemes.
Note: - The percentage might vary due to different reasons, so please check the official website of the respective state.
Good news, you may not always be subject to the full stamp duty on a gift deed in blood relation cases!
The extent of the exemption typically depends on a state permitting partial or complete exemption when transferring the property to a parent, spouse, child, or sibling. For example:
This will not only allow you to utilize reasonable transfer rates, but it will also make this gifting process simpler.
Here’s what the gift deed registration process looks like:
Tip: Don’t delay registration — incomplete or unregistered deeds are invalid in court.
Tax is another crucial factor in understanding gift deed stamp duty.
Per Section 56 (2) of the Income Tax Act, if the gifted property is to a relative, there is no tax due. If gifted as a “non-relative” and the value of the property is greater than ₹50,000, then it is taxable in the classification of “Income from Other Sources.”
If the receiver later sells the property, capital gains tax will apply, calculated from the original owner’s purchase cost.
In Conclusion, A Gift Deed is not just a legal document; it is a token of trust and love. That said, for your gift deed to be legally enforceable, you must pay the requisite stamp duty on the gift deed and register it correctly.
If you are aware of all the gift deed registration charges or any exemptions, completing the property transfer will be easier, cheaper, and less argumentative.
Looking to gift your property, our real estate professionals at Omshakthy Homes are here to help, from valuation to registration!
The stamp duty on a gift deed varies from state to state and depends on the relationship between the giver and receiver.
Yes. If stamp duty on a deed of gift is not paid, then the transfer of property will not be legally valid.
Some states allow partial refunds of gift deed charges, provided you apply within a certain time limit.
Yes, many states may exempt or reduce stamp duty on gifts from family members in a blood relation, specifically between parent to child or spouse.
If the gift is to a close relative, it’s exempt. Gifts from non-relatives exceeding ₹50,000 are taxable under the Income Tax Act.
