Stamp Duty on Gift Deed of Property: Rates, Rules and How to Calculate It

What Is a Gift Deed and Why Stamp Duty Still Applies

A gift deed records the voluntary transfer of property from one person to another without payment. Section 122 of the Transfer of Property Act, 1882, governs it. The donor transfers ownership during their lifetime. That is what separates it from a will.

The government taxes the transfer of ownership itself, not the transaction value. Under the Indian Registration Act, 1908, an unregistered gift deed for immovable property is not enforceable. Even when a father gifts a house to his son, he still pays stamp duty.

The donor pays the stamp duty and registration fee. If the donee pays instead, the transaction can be treated as a sale under the Transfer of Property Act. That reclassification can significantly change the taxes involved.

How Stamp Duty on a Gift Deed Differs From a Sale Deed

Sale deed stamp duty is applied to the transaction value, the price the buyer pays. A gift deed has no price. Most states charge a reduced rate because no commercial exchange took place. For transfers between blood relatives, several states go further and charge either a token amount or a flat fee.

The Allahabad High Court has held that stamp duty on a gift deed should be based on the property’s value, not a separately assessed market value. States apply this ruling differently in practice, so the number you actually pay depends on where the property is.

Stamp Duty Rates for Gifts to Blood Relatives vs Non-Relatives

Maharashtra is worth flagging separately. A residential or agricultural property gifted to a spouse, child, grandchild, or son’s widow attracts exactly ₹200 in stamp duty. A flat in Mumbai worth ₹1.5 crore, gifted to a daughter, attracts ₹200. Rates may change. Verify the current figure with the local Sub-Registrar or a property lawyer before executing the deed.

How Stamp Duty Is Calculated

Stamp duty on a gift deed of property is applied to the market value or the ready reckoner rate of the property, whichever is higher. The ready reckoner rate, also called the circle rate, is the minimum value the state government assigns to property in a particular area.

A straightforward example. A father gifts a flat in Bengaluru to his son. The flat’s ready reckoner value is ₹60 lakh. Karnataka charges a nominal fixed amount for transfers between blood relatives. If that same flat were gifted to a friend, Karnataka’s standard rate of around 5% applies.

₹60,00,000 × 5% = ₹3,00,000 in stamp duty.

That is what the friend transfer costs. For blood relative transfers, swap the standard rate for whatever concessional rate or flat fee your state prescribes. The base property value calculation stays the same.

Registration Charges in Addition to Stamp Duty

Stamp duty is not the only payment. The Sub-Registrar’s office also charges a separate registration fee, typically 1% of the property’s value. Some states cap this.

In Maharashtra, registration is 1% of the property value. Add the ₹200 stamp duty for a blood-relative transfer, and the total cost of registering a family gift deed is negligible even on a high-value property. Telangana splits the charges at 0.5% each, putting the total at 1% for relative transfers. Calculate both before you go. Stamp duty alone is not the full cost.

If you are planning to raise funds against a gifted property or purchase a new one, use the Home Loan Eligibility Calculator to estimate your borrowing capacity before applying.

Documents Required to Register a Gift Deed

Arriving at the Sub-Registrar’s office with missing documents means rescheduling. Bring everything on this list:

• The gift deed itself, drafted on stamp paper of the correct value, signed by the donor and donee in front of at least two witnesses who also sign the document.
• Identity proof of both parties: Aadhaar card, PAN card, or passport.
• Address proof of both parties.
• Recent passport-size photographs of both parties.
• Original title documents of the property being gifted.
• EC confirming the property has no outstanding dues, disputes, or liens.
• Property tax receipts showing payments are current up to the date of registration.
• NOC from the housing society, if the property is in a registered society.
• Relationship proof if claiming the blood relative concession: a birth certificate, marriage certificate, or equivalent document.

Tax Implications of Receiving a Gifted Property

Stamp duty is one cost. Income tax is another consideration entirely. Under Section 56(2)(x) of the Income Tax Act, 1961, property received from a specified relative is fully exempt from income tax. The property’s value does not matter. Parents, spouse, siblings, spouse’s siblings, and lineal ascendants and descendants all fall within the exempt category.

Outside that list, things change. If the property comes from a non-relative and its stamp duty value exceeds ₹50,000, the full stamp duty value is taxed as income from other sources in the year the donee receives it. On a high-value property, that is a significant tax liability.

There are two exceptions. Property received at the time of the donee’s marriage and property received through inheritance are both exempt regardless of who the donor is.

Capital gains come later. When the donee sells the property, the acquisition cost is what the original donor paid, not the value at the time of the gift. The holding period also runs from the donor’s original purchase date. Both of these details matter when calculating how much tax is owed on the eventual sale. If a home loan is taken against the property later, use the Home Loan Tax Benefit Calculator to estimate your eligible deductions under Section 80C and Section 24(b).

Step-by-Step: How to Register a Gift Deed

1. Draft the gift deed: A lawyer prepares the deed on stamp paper of the applicable value. The deed must clearly describe the property, name both parties, and confirm the transfer is voluntary and without monetary consideration.
2. Pay the stamp duty: Buy stamp paper of the correct value, or pay online through the state’s SHCIL portal, if available. The amount depends on the state rate and the property value.
3. Sign in front of witnesses: Donor and donee sign together. At least two witnesses sign at the same time. All on the same occasion, in person.
4. Go to the Sub-Registrar’s office: Both parties appear in person with all original documents: identity proofs, property papers, photographs, and the signed deed.
5. Pay the registration fee: Typically 1% of the property value, paid at the office on the day.
6. Biometric verification: The office records fingerprints and photographs of both parties. Standard procedure at all Sub-Registrar offices.
7. Collect the registered deed: The Sub-Registrar endorses the deed and returns it. That document is the legal record of the transfer.

Can a Gift Deed Be Revoked and What Happens to Stamp Duty Already Paid

A registered gift deed can be revoked. Not easily, and not on any ground the donor chooses. Section 126 of the Transfer of Property Act, 1882, sets out what qualifies. Mutual written consent of both parties works. So does a breach of a written condition in the deed; for example, a requirement that the donee care for the donor that goes unfulfilled. Gifts obtained through fraud, misrepresentation, coercion, or undue influence can be challenged in court. Senior citizens have a specific route under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, if children stop providing support after receiving the property.

The stamp duty paid on the original deed is not refunded. A court-ordered cancellation requires a fresh deed of cancellation, which attracts its own stamp duty and registration charges. The money paid the first time is gone. On a high-value property, that loss is real. Factor it in before executing a gift deed under pressure or without full certainty.

If you are planning to purchase a new home instead of receiving one as a gift, compare the latest rates across lenders on the home loan interest rate page. Use the Home Loan EMI Calculator to estimate your monthly repayments, and the Home Loan Prepayment Calculator or Home Loan Balance Transfer Calculator to plan your repayment strategy once your loan is active.