Gifting is a gesture often rooted in love, emotion, and tradition. However, when it comes to gifting cash or immovable assets such as property, it is essential to comply with the legal and regulatory framework.
UNDERSTANDING STAMP DUTY AND REGISTRATION FEES FOR GIFT DEEDS
The cost of executing a gift deed varies depending on the relationship between the donor (the person gifting the property) and the donee (the person receiving the gift). The applicable stamp duty and registration charges differ for blood relatives and non-blood relatives.
Definition of Blood Relatives
In Karnataka state, the following individuals are classified as blood relatives:
- Father
- Mother
- Brother
- Sister
- Husband
- Wife
- Son
- Daughter
Anyone outside this list is considered a non-blood relative.
Applicable Charges for Blood Relatives
- Stamp Duty: ₹5,000
- Cess on Stamps: ₹500
- Registration Fee: ₹1,000
- Scanning Fee: ₹35 per page
Applicable Charges for Non-Blood Relatives
(Percentage calculated based on the guidance value of the property)
- Stamp Duty & Surcharge: 5.1%
- Cess on Stamps: 0.5%
- Registration Fee: 1%
- Scanning Fee: Approx. ₹35 per page
ROLE OF SPECIAL POWER OF ATTORNEY (SPA)
A Special Power of Attorney is distinct from other types of power of attorney. It is used specifically for presenting a deed at the Sub-Registrar’s office, especially when the donor is residing abroad.
Under a SPA:
- The executant (donor) signs the gift deed.
- The attorney (person holding the SPA) presents the gift deed at the Sub-Registrar’s office but does not sign the deed.
SPA can be granted to any trusted individual. The stamp duty for executing SPA is ₹500 per executant, irrespective of the donee’s relationship.
CASE STUDY: GIFTING PROPERTY FROM ABROAD
Let us consider an example for better understanding.
BACKGROUND:
In 2016, Mr. Pankaj and his wife, Mrs. Shruti, jointly purchased a 3BHK flat in Bangalore. In 2018, they relocated to Stanmore, United Kingdom, and subsequently acquired UK citizenship.
Out of affection, they decided to gift their Bangalore property to Mr. Pankaj's mother, Mrs. Vidya, without any monetary consideration. The flat was later rented out by the mother, generating regular income in India.
Since Mr. Pankaj and Mrs. Shruti could not travel to India, they executed a Special Power of Attorney in favor of Mr. Pankaj’s brother, Mr. Pratik.
PROCEDURE FOLLOWED
Drafting Documents:
Drafts of the SPA and gift deed were prepared in India and emailed to Mr. Pankaj in the UK.
Execution Abroad:
Mr. Pankaj and Mrs. Shruti printed and signed the Gift Deed and SPA before a UK notary public. Only the SPA required notarization.
Courier to India:
The notarized SPA and signed gift deed were couriered to Mr. Pratik in India.
Adjudication of SPA:
- The SPA was adjudicated at the Shivajinagar District Registrar’s Office, Bangalore.
- Stamp Duty: ₹200 per executant (₹400 in total).
- (Note: The updated adjudication fee as of 11th Nov 2024 is ₹500 per executant)
Refer to below SPA Image
Online Application:
Mr. Pratik submitted the registration application on the Kaveri Online Services portal along with the following documents:
- 2016 Sale Deed
- Property Tax Receipt
- e-Khata
- Adjudicated SPA
- Gift Deed (signed)
- PAN cards of donors
- Aadhaar and PAN of donee (Mrs. Vidya)
- Aadhaar of two witnesses
The application was approved within 2 working days.
Registration at Sub-Registrar’s Office:
Documents carried:
- Application summary
- Gift Deed
- SPA
- Aadhaar cards of witnesses
- Pratik presented the gift deed (already signed by the donors).
- Vidya signed the deed at the Sub-Registrar’s office.
- Thumb impressions and webcam photographs were recorded.
(Note: Mr. Pratik, as the SPA holder, did not sign the gift deed.)
Refer to below registered Gift Deed
IMPORTANT NOTES:
- The definition of blood relatives may vary across states. For example, in some states, in-laws, nieces, and nephews may be considered blood relatives.
- While notary or Indian Embassy attestation is accepted in Karnataka for SPA, some other states may mandate attestation by the Indian Embassy.
Our Services
We provide end-to-end assistance in:
- Drafting Special Power of Attorney
- Adjudication procedures
- Gift Deed documentation
- Registration and compliance support
For professional assistance, write to us:
- pgnproperties@gmail.com
- WhatsApp: +91–97424 79020