What Does Stamp Duty on a Gift Deed Property Involves

The concept of applying for a home loan and buying a property is quite common. However, it is not always necessary for every property transaction to be a transfer between a buyer and seller. In some cases, a property can also be gifted from a transferor to a recipient. In India, it is quite common for property to be gifted among family members. Now, if you are looking to gift property to someone close, keep in mind that you will need to execute a gift deed. Even though there is no buyer or seller, you will still be required to pay the stamp duty. Do keep in mind that gift deeds are to be mandatorily registered to make the transfer of ownership valid.

Read on to understand more about a stamp duty on a gift deed property:

Gift deed

The transfer of a house through a gift deed is permitted as per Section 122 of the Transfer of Property Act, 1882. A gift deed, just like a sale deed, includes detailed information regarding the transferor, recipient, as well as the property. However, when it comes to a sale deed, the recipient is supposed to transfer a certain sum of money to the transferor in order to complete the property purchase. A gift involves no such financial transaction. A gift deed is however mandatory and needs to be registered in the recipient’s name, without which the property transfer would not be considered valid. Without the gift deed, it would not be possible for the current recipient to transfer the property in the future. Once the property is registered, you can go ahead with the acceptance process where the recipient receives the property, which is only possible if the donor is alive. Do keep in mind that the stamp duty and registration charges have to be paid at the time of registration.

Stamp duty

It is common knowledge that stamp duty is required to be paid while buying a property. But did you know that it is also required while gifting a property? The rates for stamp duty are different in various states of India. There are some states where there is no difference in the stamp duty fee charged for sale transfers as well as gift deed transfers. However, some states do provide concessions in stamp duty in case the property is being given to a direct family relative as a gift. To calculate stamp duty for the exact amount payable as per the state you are in, it is better to make use of a stamp duty calculator. This calculator will display the exact amount you would have to pay for stamp duty in the state that the property is based in.

In addition, it is important to keep in mind the types of properties that qualify as gifts under Indian laws. If you are looking to gift a property, make sure that it is transferable, tangible, movable or immovable, and not a future property.