Gift

Introduction

Gift is a common mode of transfer of property without payment. It is based on free will and usually arises out of love and affection. The Transfer of Property Act lays down clear rules to ensure that such transfers are valid.

Meaning / Definition

Under Section 122 of the Transfer of Property Act, a gift is the transfer of existing movable or immovable property made voluntarily and without consideration, by one person (donor) to another (donee), and accepted by or on behalf of the donee.

A gift is a gratuitous transfer (transfer without payment).

Types of Gift

Gift Inter Vivos

This is a gift made between two living persons.
It is a valid transfer under the Transfer of Property Act.

Testamentary Gift (Will)

This is a gift that takes effect after the death of the donor.
It is called a will and is not governed by the Transfer of Property Act.

Gift Mortis Causa

This is a gift made in expectation of death.
It is treated differently and has features of both gift and will.

Gifts under Muslim Law

When both parties are Muslims, the gift is governed by personal law (Quranic law) and not by the Transfer of Property Act, if there is inconsistency.

Essentials of a Valid Gift

Transfer of Ownership

There must be a complete transfer of ownership (all rights) from the donor to the donee.
Conditional gifts are allowed if the condition is legally valid.

Existing Property

The gift must relate to property that already exists.
Future property cannot be gifted.

Without Consideration

There must be no monetary consideration (payment).
Even a small payment makes it a sale, not a gift.
Love and affection are not treated as consideration.

Voluntary Transfer

The gift must be made freely, without force, fraud, or undue influence (improper pressure).

Competent Donor

The donor must:

• Be a major (above 18 years)
• Be of sound mind
• Be legally allowed to transfer property

A minor cannot make a gift.

Acceptance by Donee

The donee must accept the gift:

• During the lifetime of the donor
• While the donor is capable of giving

Acceptance can be made:

• By the donee
• By a guardian (in case of a minor)

If the donee dies before acceptance, the gift is void.

Important Case Law

• Nandi Singh v. Sita Ram

Distinction / Comparison

Gift vs Sale

• Gift is without consideration (no payment)
• Sale involves payment (price)
• Gift is voluntary; sale is based on agreement for price

Gift vs Will

• Gift takes effect during lifetime
• Will takes effect after death
• Gift is governed by Transfer of Property Act; will is not

Practical Example

A transfers his house to B out of love and affection, and B accepts it during A’s lifetime. This is a valid gift.
If A promises to transfer property after his death, it becomes a will, not a gift.

Summary

• Gift is transfer of property without payment
• It must be voluntary and accepted by the donee
• Only existing property can be gifted
• Donor must be competent (major and sound mind)
• Acceptance must happen during donor’s lifetime
• Gift can be inter vivos or in expectation of death
• Even small payment converts gift into sale