I have read that the duty charged for gifting residential property is only Rs.200. So, if I want to gift my flat in Andheri, do I need to pay Rs.200 as stamp duty and then register the agreement by paying the registration charges?
—Khan Nehal Ahmed
A gift of immovable property has to be made in accordance with section 122 of the Transfer of Property Act, 1882 (TOPA). A gift is considered valid when (i) it’s made voluntarily; (ii) it is without consideration; (iii) there has been an offer by the donor; and (iv) the offer has been accepted by the donee. For the gift to be valid, you must transfer the property voluntarily, without consideration, and it must be accepted by the donee during your lifetime and while you are capable of giving.
The transfer of immovable property by way of a gift must be effected by a registered and stamped instrument signed by you and must be attested by at least two witnesses in accordance with section 123 of TOPA. The donee would also normally sign the gift deed to evidence acceptance of the gift being made.
Stamp duty is payable on a gift deed, and differs across states. In Maharashtra, payment of stamp duty is governed by the Maharashtra Stamp Act, 1958. Stamp duty leviable on a gift deed wherein the subject matter is immovable property, is the same as payable on a conveyance of immovable property. Stamp duty is calculated on the basis of the property’s market value.
If the gift is made to a family member—husband, wife, brother or sister of the donor or any lineal ascendant or descendant of the donor—the duty chargeable shall be at the same rate as specified above, or 2% of property’s market value, whichever is less.
Further, vide the Maharashtra Stamp (Amendment) Act, 2015, which came into effect from 24 April 2015, it has been provided that if residential and agricultural property is gifted to a husband, wife, son, daughter, grandson, grand-daughter or wife of deceased son, duty chargeable shall be Rs.200.
Further as per section 17 of the Registration Act, 1908, it is mandatory to register a gift deed for an immovable property with the sub-registrar of assurances within whose sub-district the whole or some portion of the property is situated, within four months of execution of the gift deed. Else, transfer will be held invalid.
The applicable registration charges payable differs across states. In Maharashtra, payment of registration charges is governed by a table of fees prepared by the government in exercise of the powers conferred by section 78 of the registration Act. As per the table, the registration fee on a gift deed is leviable on an ad volorem scale on the market value of the property on which stamp duty is charged, subject to the following caps. When the property value does not exceed Rs.10,000 the fee shall be Rs.100, and where the value exceeds Rs.10,000 the fee shall be Rs.100 plus 1% of the value exceeding Rs.10,000 subject to a maximum of Rs.30,000.