Gift Deed and Stamp Duty

Why a transfer inside the family still needs a number

No money changes hands, so people assume no valuation is needed. Two things say otherwise. Stamp duty on a gift deed is calculated on the value of the property, and a transfer to somebody outside the defined circle of relatives can create a tax charge in the recipient's hands based on that value.

The relative exemption, and its edges

Gifts between close relatives, broadly spouse, siblings, siblings of a spouse or of either parent, lineal ascendants and descendants of you or your spouse, and their spouses, sit outside the charging provision. Gifts outside that circle do not.

Cousins are the classic trap. So are gifts to a friend, or to a nephew where the relationship does not fit the definition. If the transfer is anywhere near the boundary, establish the value before executing the deed, not after.

Stamp duty is a state matter

Rates and concessions differ by state, and several states charge a reduced rate on gifts to close family. Some apply a concession where the recipient is a woman. The duty is computed on the higher of the stated value and the notified circle rate, so knowing the market position before you file avoids an unpleasant recalculation at the registry.

The recipient inherits your cost

Worth understanding before anybody signs. On a gift, the recipient takes over the donor's cost of acquisition and holding period. That means when they eventually sell, the gain is computed from the original purchase, and the 1 April 2001 rule applies if the donor bought before then. A gift does not reset the clock.

What we need

• Current title deed.
• The relationship between donor and recipient, stated accurately.
• The state and district, because the duty rules are local.
• Any existing charge on the property.

Where the valuer stops

We establish value. Whether your particular transfer falls inside the relative exemption, and what duty applies in your state, are questions for your lawyer or chartered accountant. Get both answers before the deed is executed. Reversing a registered transfer is expensive and slow.

What you get

A signed report from a government approved valuer, based on a real inspection, with the workings shown so the person reading it can follow how the figure was reached. Our registration number is printed on it. If anyone questions it later, the evidence is already in the file.

• An inspection that actually happened. Our engineer stands at the property. Every photograph carries the date, the time and the exact position.
• Comparable evidence, named. Real sales from the relevant area and the relevant period, identified so anyone can check them.
• Method stated openly. Which approach we used and why, with the adjustments set out rather than buried.
• The right date. A valuation is always as at a date. Get the date wrong and the number is useless even if the work is perfect.
• Currency where you need it. Rupees for the Indian side, converted for your side, with the exchange rate and its source stated.

How long it takes

Normally 48 to 72 hours from the site visit, once we have the basic papers. If it is urgent, tell us and we will treat it that way. For anything tied to a sale, start before you sign the agreement rather than after, because some of the biggest savings are only available in advance.

What it costs

It depends on the property type, its size and how far our engineer has to travel. Message us with the basic details and you get a firm figure before any work starts. No surprises later, and five percent off your first report.

What if the papers are missing

Very common, and usually not a problem. A deed from 1974 may simply not exist in the family any more. Records at the sub registrar office, property tax records and the notified rates for the area can normally fill the gap. Tell us what you do have and we will tell you straight away whether it is workable.

Questions people ask

Is a gift to family taxable?

Gifts between close relatives as defined in the law are outside the charge. Gifts to cousins, friends or others outside that circle can create tax in the recipient's hands.

How is stamp duty on a gift deed worked out?

It is a state matter and is calculated on the property's value, usually the higher of the stated value and the circle rate. Some states give concessions for close family.

Does the recipient start a new cost base?

No. The recipient takes over the donor's cost and holding period, so the 1 April 2001 rule still applies if the donor bought before then.