- Date : 30/09/2023
- Read: 3 mins
Get answers to questions related to gift deeds. Learn if you can sell gifted properties as a donor or a donee and what regulations govern you.
Selling a gift deed registered property
Also Read: What is a Gift Deed?
Gifted a property to someone and now wish to sell it? Transferred an estate via a registered gift deed as a Hindu donor and now looking to sell it? Or just got gifted a property and wish to sell it? Let’s find out what options you have.
Any immovable property can be transferred to a donee via a gift deed, defined under Section 122 of the Transfer of Property Act, of 1882.
A gift deed is very similar to a sales deed but unlike a sales deed, the donee need not pay any money for the transfer.
Under the Registration Act’s Section 17 and according to the Transfer of Property Act’s section 123, a gift deed has to be registered with the sub-registrar’s office.
Both the donor and the donee need to be alive during the process of the deed registration.
Two additional witnesses are required during the procedure.
As a donor who has irrevocably transferred property as a gift deed, you cannot sell it now to a third party. The gift deed holds legal precedence over the sales deed.
Can I sell a property that I gifted?
The straightforward answer - no. Once you have registered a property as a gift, the donee retains all rights to it. Hence, even if you sell it to a third-party purchaser, they will not be able to gain any rights on the property.
However, Section 126 of the Property Transfer Act has provisions in place, for instances wherein the donor can have the privilege to revoke a registered gift deed in case of certain situations.
Can I sell a property gifted to me?
Yes, if a gifted property does not carry any additional terms and conditions, you can sell a property gifted to you with the following requirements:
The registered gift deed as proof of the property gifted to you.
A copy of the gift deed registered with the sub-registrar to give to your buyer.
Any sort of taxes, loans, etc. on the property need to be paid off and as the seller, and you need to produce a No Objection Certificate (NOC) detailing the aforementioned before you are ready to sell your property.
Remember, any capital gain from the property sale will be taxable. The duration of the holding will be considered since the date of purchase by the original owner and not since the date of gifting. If the duration is found to be more than 24 months, the profits will come under Long Term Capital Gains (LTCG) and will be taxable at a rate of 20%, apart from cess and surcharge.
Also Read: Can You Take Back Your Gift Deed?
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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.