Property transfer within families is common in India, yet many people are confused about whether to use a Gift Deed or a Will. Choosing the wrong method can lead to legal disputes, tax issues, and future litigation. Understanding the difference helps families make informed and legally sound decisions.
What Is a Gift Deed?
A Gift Deed is a legal document through which a property owner voluntarily transfers ownership to another person during their lifetime without monetary consideration. Once executed and registered, the transfer is immediate and irrevocable.
Gift deeds are commonly used between parents and children or close relatives.
What Is a Will?
A Will is a legal declaration of a person’s intention regarding distribution of property after death. Ownership does not transfer immediately; it comes into effect only after the testator’s death.
A Will can be changed or revoked any number of times during the person’s lifetime.
Key Differences Between Gift Deed and Will
A gift deed takes effect immediately, while a Will takes effect after death. A gift deed is generally irrevocable, whereas a Will is revocable. Gift deeds require compulsory registration; Wills do not, though registration is advisable.
Tax Implications
Gifts to specified relatives are exempt from income tax, but stamp duty applies. Wills do not attract stamp duty. Tax planning is an important consideration when choosing the method.
Legal Risks and Challenges
Gift deeds are harder to challenge legally once executed. Wills are more prone to disputes, especially when multiple heirs are involved or documentation is unclear.
Which Is Better?
If immediate transfer and certainty are required, a gift deed is better. If flexibility and control during lifetime are priorities, a Will is preferable.
Conclusion
Both tools have legal value. The right choice depends on family structure, tax planning, and long-term intent. Legal consultation ensures safe and dispute-free transfer.