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This article will walk you through the essentials of drafting a gift deed, from its core concepts to the key components and a practical drafting process. Whether you are a budding lawyer or someone looking to understand how to draft a gift deed, this guide has you covered with everything you need to know.

Introduction

I had just wrapped up my lunch and was about to step out for a walk.

That is when my best friend stepped in unannounced. I was surprised. I asked her, “What are you doing here?“.

She replied, “My father wants to give one of his flats to me for my 35th birthday. How should we go about it? 

People generally get a voucher or a coffee mug as a gift, and here is the friend getting a flat as a gift instead.

I suggested that she go for a gift deed. I explained everything she needed to know about it.

 She said she would speak to her dad by the end of the day and get back to me. 

That evening, she gave me the green signal to proceed with drafting the document.

I drafted the gift deed the next day and after her approval, I asked my clerk to help my friend get it registered.

My clerk got the gift deed registered the very same day and handed the original gift deed to my friend after a couple of days. 

And just like that, my friend became the proud owner of the flat. 

A gift deed is an important document for transfer, and once you understand how to proceed, you can become the go-to person for clients looking to transfer property.

Today, I will explain everything about a gift deed to you, just as I did to my best friend, so that it is easier for you to understand. 

Are you interested in knowing about gift deeds? Let us begin, then.

First, let us see what a gift deed is.

What is a gift deed?

What do you understand by the term gift deed? Can you guess?

As the name suggests, it is a gift that enables one person (the donor) to voluntarily transfer ownership of movable or immovable property to another person (the donee) without any monetary consideration. Gift deeds are generally out of natural love and affection.  

The term gift has been defined in section 122 of the Transfer of Property Act, 1882. You will read about that when we deal with the legal provisions.

For a gift to be valid, there are some key conditions. Let us have a look at those:

1. Voluntary

The person who desires to gift must act out of their own will, free from any sort of coercion, fraud, or undue influence.

2.        Without monetary consideration

There is no monetary consideration involved in a gift deed. Such an act is usually done out of love and affection, which is considered the primary consideration.

3.        Accepted by the donee 

Acceptance of the gift is essential. The donee must accept the gift during the donor’s lifetime and in a situation where the donor is capable of doing so. If the donee dies before acceptance, then it shall become void. 

4.        Specific property

A gift shall be made of a specific movable or immovable property and moreover, the property must be in existence. A gift of the future property cannot be done. 

Above, you read about what a gift is, but you also need to know what can be gifted. Read further to know. 

What can be gifted?

You must know that not everything can be given as a gift. Under Indian law, the following can be gifted:

1. Movable property

Movable property includes jewellery, vehicles, artwork, shares, securities, or financial instruments.

2. Immovable property

Immovable property includes land, houses, flats or commercial properties that are permanently fastened to the earth. 

3. Existing property

You can only gift property that exists at the time of gifting; any future property that is not in existence cannot be gifted, as per section 124 of the Transfer of Property Act, 1882.

Some of you may wonder why opt for a gift deed when the same can be achieved through a Will. Let us see the difference to understand the why.

What is the difference between a gift deed and a Will?

Gift deeds and Wills are both used to transfer property, but they serve distinct purposes and operate differently. Here is a clear comparison between the two.:

Purpose	Gift deed	Will
Transfer	The transfer of the property takes effect immediately upon execution and registration of the deed.	The transfer takes effect after the death of the testator only after the testator’s death.
Revocability	It is generally irrevocable once registered, except in the circumstances mentioned in section 126 of the Transfer of Property Act, 1882.	It can be revoked, cancelled or amended anytime during the testator’s lifetime.
Registration	Mandatory for immovable property; optional for movable property.	Not mandatory, though advisable for clarity.
Purpose	It is given out of love and affection, during the lifetime of the donor.	It pertains to the last wishes of the testator with regard to the distribution of assets post the death of the testator.

By reading this, you have understood the difference between the two. This distinction is crucial for estate planning, as a gift deed avoids probate or letters of administration but requires registration, while a Will offers flexibility but delays transfer.

Let us see the legal framework. 

What is the legal framework of a gift deed?

As mentioned earlier, the term gift is defined in section 122 of the Transfer of Property Act, 1882. The legal foundation for gift deeds in India is the Transfer of Property Act, 1882, specifically sections 122 to 128, which outline the rules and conditions for a valid gift. I have broken it down for better understanding. 

1. Section 122: Definition of gift

A gift is defined as a transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Such a gift shall be accepted during the donor’s lifetime and while the donor is still capable of giving, otherwise, if the donee dies before acceptance, the gift is void.

2. Section 123: Transfer how effected

The gift of an immovable property must be made through a registered instrument signed by or on behalf of the donor and at least two witnesses shall sign it. 

In case of a gift of movable property, it may be affected by a registered instrument as mentioned above, or delivery of possession (e.g., handing over a car’s keys).

3. Section 124: Gift of existing and future property

In case of a gift comprising existing and future property (property not yet owned by the donor or in existence), the gift is void with respect to the future property but valid with respect to the existing property.

4. Section 125: Gift to several, of whom one does not accept

If a gift is made to multiple persons and one of them does not accept it, the gift is void for that person, but valid for the others who do accept it.

5. Section 126: When gift may be suspended or revoked

The donor (the person giving the gift) and the donee (the person receiving the gift) can agree that if a certain event happens, and that event is not dependent on the will of the donor, the gift can be suspended or revoked;

But, if they agree that the gift can be cancelled just because the donor feels like it, without any specific event, then such an agreement is not valid. That means the gift (or the part of it) will be treated as void.

Additionally, a gift can be cancelled in the same situations where a contract can be cancelled (except in cases of without consideration or failure of consideration). Other than these cases, a gift cannot be cancelled.

6. Section 127: Onerous gifts

An onerous gift is one where the donee accepts an obligation along with the gift (e.g., maintaining the property). If the donee refuses the obligation, the donor can reclaim the property. 

However, if a gift consists of two or more separate and independent transfers of different things to the same person, the donee (the person receiving the gift) is free to accept one gift and refuse the others, even if the gift they accept is beneficial (good) and the ones they refuse are onerous (burdensome or troublesome).

8. Section 128: Universal donee

A universal donee is someone who receives the entire remaining interest of the donor in certain property. They are responsible for any obligations attached to the gift.

Moving on, before we begin drafting, let us review the key components of a gift deed. Once you know the key components, it will be easy for you to draft. 

What are the key components of a gift deed?

By key components, I mean the essential terms or the clauses that form a particular deed or agreement.

Let us see what it includes. 

1. Title and opening clause

This introductory portion identifies the nature of the document and specifies the date and place of execution, and introduces the parties involved (Donor and Donee) with their names, ages, addresses, and a legal phrase extending the terms to their heirs, executors, and administrators.

2. Recitals

This provides the circumstances in which the Donor acquired the flat, the relationship between the Donor and the Donee, and the intention to gift the property and to accept the gift on certain terms and conditions.

3. Gift clause

This marks the beginning of the operative clauses of the gift deed, where the Donor formally gifts the property to the Donee without any monetary consideration but in consideration of natural love and affection between the Donor and Donee.

4. Covenant of authority

This clause guarantees that the Donor has the legal right, full authority, and power to transfer the property to the Donee. It ensures that the Donor is legally capable of making the gift and that the transfer is valid and binding.

5. Covenant against encumbrances

In this clause, the Donor warrants that the Donor has not taken any action (e.g., created liens, mortgages, or debts) that would prevent the transfer, ensuring the Donee receives a clear title.

6. Covenant of cooperation

This clause obligates the Donor (and any claimants through them) to assist the Donee in securing full ownership, such as by signing society transfer forms or appearing before authorities, at the Donee’s cost..

7. Confirmation of donee’s rights

This clause clarifies that the Donee is the sole owner of the property after the gift is made. It may also contain any conditions, such as the Donor’s right to reside in the flat for life. 

8. Description of property

The schedule of the property contains a detailed description of the property that is being gifted, for the purpose of clarity and to prevent disputes over what is being transferred. 

9. Signature and witnesses

The signatures confirm the parties’ agreement to the gift, with witnesses (required under Indian law) validating the execution.

Now, coming to the most crucial part, that is the drafting of a gift deed.

How to draft a gift deed?

I will take the following example to draft a gift deed.

John Justin D’Mello, the Donor, is the father of Sabrina Asher Pinto, the Donee. John Justin D’Mello owns flat no.2103 on the 21st floor of the building known as Aureate Residences, situated at K.D Marg, Reclamation, Bandra (West), Mumbai-400050, purchased via a registered sale deed in 2008. Out of love and affection, John wishes to gift the flat to Sabrina.

Let us begin.

Explanation: This opening sentence describes the nature of the document that is being made and also mentions when and where the deed is being made and executed between the parties. This part also introduces the parties involved, i.e., the Donor (the person desirous of gifting) and the Donee (the person who is accepting the gift). You also mention their age, addresses, and PAN numbers, including their legal successors. It shall contain the name and address of the parties. The phrase “which expression ………. and administrators” means that the term donor and Donee shall extend to the legal heirs or successors unless it is otherwise provided for.

This DEED OF GIFT made at Bombay this 25th day of April, 2025, between JOHN JUSTIN D’MELLO, aged 72 years of Bombay Indian Inhabitant residing at Flat No.D-703, 7^th Floor, National Avenue, Akurli Road, Vashi, Sector 17, Navi Mumbai-400703 hereinafter referred to as the “DONOR” (which expression shall unless it be repugnant to the context or meaning thereof, be deemed to mean and include their respective heirs, executors and administrators) on the one part AND SABRINA ASHER PINTO, aged 35 years of Bombay Indian Inhabitant residing at Bunglow no.41, Versova, Andheri (West), Mumbai-400061, hereinafter referred to as the “DONEE” (which expression shall unless it be repugnant to the context or meaning thereof, be deemed to mean and include her heirs, executors and administrators)  on the other part.

Explanation: You then start writing what is known as recitals. The recitals begin with “Whereas,” providing the background by explaining the history of how the property was acquired and the intentions of the donor and donee. You must provide full details of the property. Each recital serves to justify the Donor’s ownership, intent, and the Donee’s acceptance.

 WHEREAS

Explanation: This shows the relationship between the Donor and the Donee, who are father and daughter. This confirms the relationship, which is crucial for determining the stamp duty and other tax implications. 

1] The DONOR is the father of the DONEE, namely Sabrina Asher Pinto. The DONEE is the real blood relation daughter of the DONOR. The DONEE is married and resides with her husband at her marital residence. 

Explanation: This section provides an overview of the property’s acquisition history.  It shows that the donor is lawfully the owner of the property and has the right to gift the property to anyone as per his wish. 

2] By and under the registered articles of agreement for sale dated 17.10.2008 entered into between one M/s.Shree Sadguru Developers therein referred to as “the Developers” of the one part and DONOR herein therein referred to as the “Purchaser” of the other part, the DONOR herein purchased and/or acquired on ownership basis the said developers Flat No.2103 on the 21st floor of the building known as Aureate Residences situate at K.D Marg, Reclamation, Bandra (West), Mumbai-400050 and constructed on a plot of land bearing Plot No.A bearing CTS No.137 (part) and more particularly described in the schedule hereundwritten at or for the price and/or for the consideration therein mentioned and as such by virtue of the said agreement the DONOR herein are the absolute owners of the said flat (hereinafter referred to as “the said flat”). 

Explanation: This shows that the flat is part of a co-operative housing society, which has been formed by the members jointly. It also confirms the membership of the donor in the society. You can mention the registration number of the society.

3] All the purchasers in the said building, Aureate Residences, thereafter formed a co-operative housing society of all flat purchasers known as Aureate Residences Co-operative Housing Society Ltd, which is registered as a Cooperative Housing Society under No.Bom/3603 of _____________ under the Maharashtra Co-operative Societies (hereinafter referred to as “the said society”). The DONOR is a member of the society.

Explanation: In this clause, you mention the share certificate issued by the society, by giving details of the certificate number, distinctive numbers, date of issue and also the amount of fully paid-up share, along with the price of each share. 

 4] The said society issued to the DONOR five fully paid up shares of Rs. 50/- each bearing distinctive nos.200 to 205 under certificate no.12456 dated ______________  of the said society  (hereinafter referred to as “the said shares”).

 Explanation: You mention that the donor is the absolute owner of the flat and holds shares on the basis of what has been mentioned earlier.

5] In premise aforesaid, the DONOR is absolutely sized and possessed of and/or otherwise well and sufficiently entitled to the said flat and the said shares as the absolute owner thereof.

 Explanation: In this part, you mention the intention of the donor to gift the flat and shares to the donee.

6] The DONOR has decided to gift the said flat and the said shares to the DONEE who is the real daughter of the DONOR.

Explanation: This is a very important clause wherein you need to clearly mention that the donee has accepted the gift in order to complete the gift. If you do not mention this clause, the gift will not be valid, because it is mandatory for the donee to accept the gift.

7] The DONEE has accepted the said gift as evident by the execution of this Gift Deed by DONEE.

 Explanation: From hereon, the operative clause begins, which outlines the actual transfer of the property and the terms that govern the gift.

NOW THIS DEED OF GIFT WITNESSETH AND IT IS HEREBY RECORDED AS UNDER: 

Explanation: This clause effects the transfer of the flat and the shares from the Donor to the Donee and the transfer is out of natural love and affection, which is a valid consideration in the eyes of law. The transfer includes additional rights or benefits associated with the property and the property to be gifted shall be described in the schedule.

That for effectuating the said desire of the DONOR and in consideration of natural love and affection which the DONOR bears towards the DONEE who is the real daughter of the DONOR, the DONOR do and each of them doth hereby grant, convey, transfer and assign unto the DONEE all his respective right, title, interest or claim of any nature whatsoever in the said Flat No.2103 on the 21st floor of the building known as Aureate Residences situate at K.D Marg, Reclamation, Bandra (West), Mumbai-400050, togetherwith all his right, title and interest in the said five fully paid up shares of Rs.50/- each of the said society under certificate no.12456  dated _______________ of the said society (hereinafter referred to as the said shares) and the said flat and the said shares collectively hereinafter referred to as the said premises and more particularly described in the schedule hereunderwritten  together with all his rights, credits, advantages and appurtenances whatsoever of and the said premises or any part thereof and all the estate, interest, claims and demands whatsoever of the DONOR in an upon the said premises as aforesaid.

Explanation: This clause states that the property is transferred to the donee for use absolutely. However, the donee is responsible for paying all current and future taxes, fees, and other charges related to the property.

AND TO HAVE TO HOLD the same unto and to the use of the DONEE absolutely but subject to the rates, taxes, dues and duties now payable and hereafter to become payable in respect of the said premises to Municipal Corporation of Greater Bombay and/or the said Aureate Residences and/or any other local authority or Government 

Explanation: This part confirms that the donor now has no rights to the property and the property will belong entirely and exclusively to the donee.

AND THIS INDENTURE FURTHER RECORDS and the DONOR DO AND EACH OF THEM DOTH hereby declare that the DONOR has now no right, title and interest or claim of any nature whatsoever in respect of the said premises and/or any part thereof and the same hereafter shall belong absolutely to DONEE 

Explanation: Here, the donor guarantees to the donee that the donor has the legal right, authority, and power to transfer the property to the donee.

AND the DONOR DO AND EACH OF THEM DOTH hereby represent, warrant and covenant with the DONEE THAT  they  the DONOR has good right, full power and absolute authority to grant, release, convey and assure the said premises hereby granted, released, conveyed, and assured or intended so to be unto and to the use of the DONEE in manner aforesaid 

Explanation: In this clause, the donor assures the donee that they have not done anything (e.g., signed agreements, created debts, or allowed legal issues) that would create any encumbrances (like liens, mortgages, or legal claims) on the property. 

AND the DONOR DO AND EACH OF THEM DOTH hereby further represent, warrant and covenant with the DONEE THAT the DONOR has not at any time hereto fore done or executed or knowingly suffered or been party or privy to any act deed or thing whereby or by reasons or means whereof the said premises hereby assured or any part thereof may be encumbered or affected in any manner whatsoever or whereby the DONOR is in anywise prevented from transferring, granting, conveying and assuring the said premises or any part thereof in the manner aforesaid

Explanation: This clause obligates the donor (and anyone else who might claim an interest in the property through the donor) to cooperate in the future, if needed, to ensure the property is fully and legally transferred to the donee. This might include signing additional documents or taking other actions, at the request and expense of the donee, to confirm the donee’s ownership. It is also advisable to obtain a no-objection certificate (NOC) from the society to transfer the flats in a society before executing the document to ensure that the membership and the shares are transferred in favour of the beneficial owner without any issue.

AND FURTHER THAT the DONOR and every person having or lawfully or equitably claiming any estate, right, title or interest in the said Premises under or in trust for the DONOR shall and will from time to time and at all times hereafter, at the request and cost of the person or persons requiring the same, execute or do or cause to be executed and done all such assurances, acts, deeds, matters and things whatsoever as may be reasonably required for the further and more perfectly and effectually assuring the said premises and every part thereof unto and to the use of the DONEE.

Explanation: This part specifies a condition under which the donor or, after the donor’s death, any surviving person mentioned, such as a spouse, retains the right to live in the gifted flat for the rest of their life. The donee agrees to this condition and accepts the property with this condition, meaning that the donee cannot interfere with the donor’s (or survivor’s) right to reside there.

And this Deed further witnesseth that the Gift made herein is subject to the rights of the DONOR during his life and thereafter right of the survivor to reside in the said flat gifted herein in the manner the DONOR or the survivor thereof may deem fit and/or desire and the DONEE has accepted this condition subject to which the DONEE has accepted the Gift of the said premises as contained herein.

Explanation: This is a formal statement indicating that both the donor and the donee have signed the document to confirm their agreement to the terms of the gift. 

IN WITNESS WHEREOF the DONOR as well as the DONEE by way of acceptance of the said gift have put their respective hands on the day and year first hereinabove written.

Explanation: This part provides a detailed description of the property to be gifted.

 THE SCHEDULE OF THE PROPERTY ABOVE REFERRED TO: 

All the right, title and interest of the DONOR in the said Flat No.2103 on the 21st floor of the building known as Aureate Residences situate at K.D Marg, Reclamation, Bandra (West), Mumbai-400050 and constructed on a plot of land bearing Plot No.A bearing CTS No.137 (part)  

                         

This was not rocket science, was it?

Once you grasp the basics and essential components of a gift deed, drafting one is quite simple.

 It is a hands-on skill, so once you have mastered it, you find that it’s not just useful, but also profitable.

The next question is whether it is necessary to register a gift deed.

Is registration of a gift deed mandatory?

It is mandatory to register a gift deed in respect of an immovable property as per section 17(1)(a) of the Registration Act,1908

However, so far as the gift of movable property is concerned, delivery is sufficient, and it is not mandatory to register a gift deed in respect of the movable property.

Let us examine the consequences of not registering a gift deed.

What happens if a gift deed is not registered?

If you do not register a gift deed to transfer an immovable property, then the consequences of section 49  of the Registration Act,1908 shall apply. This means:

• The gift deed shall be invalid 
• The transfer of ownership does not occur.
• The deed cannot be used as evidence in court.
• The donor retains legal ownership, and there is a risk that disputes may arise in the future and third parties may challenge the transfer.

Another essential aspect is understanding the stamp duty and registration charges associated with a gift deed. Let us find out.

What are the stamp duty and registration charges of a gift deed in India?

Stamp duty and registration charges vary by state and the relationship between donor and donee.

I have provided the stamp duty as well as the registration charges below:

• If a gift deed is executed in respect of a residential or agricultural property to close relatives such as a spouse, children, grandchildren, or the wife of a deceased son, then as per Article 34 of the Maharashtra Stamp Act, the stamp duty will be 1% of the market value of the property (charged because of metro cess) and the registration charge will be Rs.200/-.
• When a property is gifted to a family member, such as the donor’s husband, wife, brother, sister, or any lineal ascendant or descendant, then, as per Article 34 of the Maharashtra Stamp Act, the stamp duty is 4% (3% stamp duty + 1% metro cess) of the market value of the property and the registration charge will be 1% of the value of the property or Rs.30,000/-, whichever is lower.
• In all other cases, a gift of property to others is subject to the same stamp duty as a conveyance deed i.e. 6% (5% stamp duty + 1% metro cess) as per Article 34 of the Maharashtra Stamp Act and the registration charge will be 1% of the value of the property or Rs.30,000/-, whichever is lower.

Therefore, you must check the stamp duty and registration charges once in your respective States before advising your client to execute a gift deed.

Conclusion

With this knowledge, you can confidently assist clients in gifting property securely and legally. By understanding the key components, legal framework, and registration requirements, you can create a water-tight gift deed to ensure a smooth transfer. But always ensure that you comply with state-specific stamp duty and registration charges and rules to validate the deed. 

Frequently asked questions (FAQs)

1. Can a gift deed be used to transfer property to a minor?

Yes, you can transfer a property to a minor through a guardian by way of a gift deed, wherein the guardian must accept the gift on behalf of the minor.

2. Can future property be gifted through a gift deed?

No, you cannot gift a future property through a gift deed. It is necessary that the property is existing, tangible, and transferable in nature in order to be transferred by way of a gift deed

3. Can a gift deed be made in favour of an unborn person or entity not yet in existence?

No, a gift deed cannot be made in favour of an unborn person or entity not in existence.

4. Can a donor reserve a life interest while gifting immovable property?

Yes, a donor can gift the ownership of the property but retain the right to live in or use the property during their lifetime. It is necessary to mention it in the deed to avoid any dispute.

5. Can a donor gift a mortgaged property to a donee?

Yes, a donor can gift a property that is either mortgaged or otherwise encumbered. But, the donor must disclose the same in the deed and the donee must accept the property along with the liability or the donor must undertake to repay the debt. Lastly, if the deed of mortgage requires a prior consent of the lender to transfer, you may need to obtain a NOC(No Objection Certificate) from the bank to avoid any issues of default.