Stamp Duty on a Gift Deed for a Family Member

Gift Deed for a Family Member : When exchanging properties in India, the buyer is require to pay the registration fee and stamp duty in order to officially document the ownership transfer. Gifting property is not an exception to this law. Those gifting immovable property may be required to pay stamp duty & registration fees, which can range from 2% to 7% depending on the state in which the property is located, in order to have the gift deed properly recorded.

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Some jurisdictions grant a partial or whole rebate on this payment if the present is being exchange among blood relations, even though the majority of states levy a set amount as stamp duty on gift deed registration.

To this end, who are blood relatives?

The Income Tax Act of India specifies which relatives are consider “blood relatives” for the purpose of avoiding taxes. Among them are:

a) Partner

c) A sibling or siblings

c) The spouse’s brother or sister

d) Either the parents’ brother or sister

e) Any descendant or ascendant in a line

f) Any spouse’s lineal descendants or ascendants

g) The spouse of the individuals mentioned in (b) through (f)

States that provide stamp duty rebates on gift deeds to blood relations include Madhya Pradesh, Maharashtra, and Uttar Pradesh. Stamp duty on gift deeds can be fully or partially refunded in Rajasthan and Punjab.

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Maharashtra

In Maharashtra, stamp duty on the gifting of residential or agricultural property to a son’s widow, children, grandchildren, or spouse only needs to be paid in token amounts, up to Rs 200. This is true regardless of the property’s worth. The state has been implementing this regulation since 2015.

State of Madhya Pradesh

Gift deeds in Madhya Pradesh are subject to 5% stamp duty. On the other hand, stamp duty is 400 basis points lower when property is gifted from one family member to another; the donor just has to pay 1% of the total stamp duty.

The state of Uttar Pradesh

The Uttar Pradesh Cabinet made the decision to lower the state’s stamp duty & registration fees for interfamily property transfers in June 2022. The UP cabinet reduced the total stamp duty and registration rate for such property sales to Rs 7,000, which includes Rs 6,000 in stamp duty and Rs 1,000 in processing cost, during a meeting, presided over by chief minister Yogi Adityanath.

Rajasthan

In Rajasthan, stamp duty does not apply when a husband gives his wife a gift of real estate. This rebate, however, is limit to the wife alone because, in the event that the property is being transfer as a gift in the names of the father, mother, son, sister, daughter-in-law, grandson, or daughter, stamp duty of 2.5% of the property value must be paid.

Punjab

Following a 2014 Punjab government ruling, stamp duty is not applicable to real estate transfers between blood relatives. If not, 6% stamp duty must be paid for the state to register gift deeds.

Following the announcement, Bikram Singh Majithia, the state revenue minister of Punjab at the time, told the media, “The decision is in line with the government’s desire to encourage people to should register their property legally as opposed to using ultra vires tactics, which only served to exacerbate intra-family conflicts.”

State of Haryana

Since 2014, gift deeds transferring property from one blood relative to another have been eligible for a total remission from Haryana regarding stamp duty payments.

The Uttar Pradesh

Additionally, this hill state offers rebates for family property gifts. In Uttarakhand, there is just 1% stamp tax on gifts given to family members, as oppose to 5% for ordinary gift items.

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2024 stamp duty on gift deeds in the Indian states

State
Stamp duty as a percentage of the property value

Bihar
5.7% (for women) and 6% (for men)
Jharkhand
3%
Madhya Pradesh
1%
Andhra Pradesh
2%
Himachal Pradesh
6%
Maharashtra
3%
Gujarat
3.5%
Rajasthan
6%
UP
2%
Haryana
5%
Delhi
4%
Tamil Nadu
7%
Karnataka
5%
Punjab
6%

Stamp duty factors pertaining to gift deeds

As a means of transferring property, gift deeds are subject to stamp duty & registration fees in every state in India. Some jurisdictions, however, make a distinction between gifts given to blood relatives and gifts given to strangers. When property is gift from one blood relative to another, certain states, including Maharashtra, UP, Madhya Pradesh, Rajasthan, Punjab, Haryana, and Uttarakhand, differentiate themselves by imposing a lower stamp duty rate. This relaxation is provided to make it simple and tax-free for family members to transfer property to one another.

Be advise, however, that unlike sale deeds, gift deed registration is not subject to relaxation base on the gender of the done or the doner. Whether between blood relations or not, the stamp duty on gift deeds is the same for both sexes.

This also applies to the sale deed’s location-based relaxation. In many jurisdictions, properties in rural or underdeveloped areas are eligible for a reduced rate of duty when they are transfer through a sale deed. This is untrue when it comes to gift deeds, whether they are between blood relations or not.

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A legitimate method of dividing up property among family members is gifting. But be aware that gift deeds take effect right away following registration. Thus, a will could be an additional way to transfer property to a family member. A Will, as opposed to a gift deed, takes effect following the owner of the property’s passing.

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