There may come a time when one would prefer to transfer his ownership interest in property or liquid investments like shares or mutual funds to his daughter or sister. In such cases, transfer through gift deed can be the most beneficial option. In another scenario, after one’s death, one may need to ensure that his/her assets are transferred to his/her dependents as per his/her will and in certain proportions, executing a will may be a suitable option. Is.

A will is written while the testator is alive and takes effect after his death. A gift under section 122 of the Transfer of Property Act is a transfer of property/property made by a donor (property of the property) without consideration of his free will.

The recipient or beneficiary of a gift or bequest may be anyone or any entity, whether they are members of the same family, friends, or otherwise connected; However, the document must be viewed by two people.

The gifting process can be divided into the following three stages:

making a gift deedGift Deed is a legal document that states what is being transferred and to whom. A gift deed is an agreement between a donor and a donee that outlines the simultaneous and reciprocal act of giving and receiving. To be valid, a gift must be given voluntarily and not under coercion and without the exchange of money.

Acceptance: It is a legal requirement that the gift be accepted after it has been executed, and the recipient must accept the gift during the lifetime of the donor. If the didi does not accept the gift, it becomes void. Acts like taking possession of the property can validate the acceptance.

Registration: As per section 123 of the Transfer of Property Act, a gift of immovable property cannot transfer any title unless it is registered. During registration, two witnesses have to be attested, and title transfer is possible after registration.

A testament is written by a testator who wishes to pass on his property to his chosen ones, but only after his death. An executor is appointed by the will and is done with the purpose of executing the will with the purpose mentioned in the will. The testament will not begin until the testator dies.

As stated in Section 74 of the Indian Succession Act, 1925, the Will must be written by a person of sound mind. It can be written by the testator or his agent, but it must be attested by at least two persons who are third parties to the will.

Advantages and Disadvantages of Gift Deed Vs Will

Benefit

1. It is made during the lifetime of the donor and the transfer takes place immediately, whereas a “will” is relevant only after death.

2. A gift deed must be registered before it becomes effective. Registration reduces the chances of getting sued. On the other hand, “will” is prone to litigation.

3. Gift deed transfer is tax free for both the giver and the beneficiary.

Harm

1. Once the gift deed is executed, it is irrevocable, however, the “Will” can be amended as many times as you wish.

2. In case of gift deed, there is additional payment as stamp duty. The amount of stamp duty varies by state.

Immovable property, such as land, a house or an apartment, can now be passed on to one’s children or blood relations without paying stamp duty. As per Section 34 of the Maharashtra Stamp Act, which was amended in 2017, if the property in question is a residential or agricultural property and is gifted (without any payment) to family members, the stamp on the gift deed in relation to blood The fee is INR 200 in Maharashtra 2021 or Gift Deed Stamp Duty Mumbai/Gift Deed Stamp Duty Pune/Gift Deed Stamp Duty Thane. Real estate such as land, a house, or an apartment can now be given to the owner’s children or even blood relatives. 500 by signing a transfer document on stamp paper and paying any stamp duty on the gift deed.

As a result, there is no stamp duty on gift deeds for blood relatives in Maharashtra. Gift of movable property such as shares, ETFs, mutual funds, jewellery, drawings etc., without consideration and exceeding the fair market value of Rs 50,000 is taxable in the hands of the recipient under section 56(2) of income-tax. Take action. Income from capital gains on sale of shares, ETFs, mutual funds, etc. received as gifts will be taxable under the head :