Agreement & Contract

28 POST

LegalKart - Download the app for consumer App

Download LegalKart

Trusted
Affordable
Secure

Gift deed in India: An Overview

A gift deed is a legal document that transfers the ownership of a property or asset from one person to another without any exchange of money. It is an instrument of transfer of property that is commonly used in India to gift property to family members or close relatives. In this blog, we will discuss the validity and structure of a gift deed in India.

Validity of a gift deed

To be legally valid, a gift deed must fulfill certain legal requirements. These requirements are outlined in the Transfer of Property Act, 1882 and the Indian Registration Act, 1908. The key requirements for a gift deed to be valid are:

Competency of parties

The donor and the donee must be competent to enter into a gift deed. This means that they must be of sound mind, not minors, and should have the legal capacity to transfer and receive property.

Free consent

The gift must be made by the donor out of his or her free consent. This means that the donor should not be under any undue influence or coercion and should fully understand the implications of the gift.

Acceptance

The gift must be accepted by the donee. Acceptance can be express or implied, but it must be made during the lifetime of the donor.

Delivery

The gift must be delivered by the donor to the donee. Delivery can be physical, constructive, or symbolic, but it must be unconditional and irrevocable.

Registration

The gift deed must be registered with the Sub-Registrar of Assurances in the jurisdiction where the property is located. This is a mandatory requirement under Section 17 of the Indian Registration Act, 1908, and failure to register the gift deed can render it invalid.

Structure of a gift deed

The gift deed must be drafted in a specific format and must contain certain essential elements. These include:

a) Title

The gift deed should have a clear and concise title that reflects the purpose of the document. This can be "Gift Deed" or "Deed of Gift".

b) Introduction

The introduction of the gift deed should include the names and addresses of the donor and the donee, as well as a brief description of the property being gifted.

c) Recitals

The recitals of the gift deed should provide the context and background of the gift. This can include the reason for the gift, the relationship between the donor and the donee, and any other relevant details.

d) Operative clause

The operative clause of the gift deed is the section that actually transfers the property from the donor to the donee. This should be clearly worded and should specify the nature and extent of the property being gifted.

e) Consideration

The gift deed should explicitly state that no consideration has been exchanged between the donor and the donee. This is a key requirement for a gift deed to be valid, as any exchange of money or other consideration would render the gift deed void.

f) Covenants

The covenants of the gift deed are the promises made by the donor and the donee. These can include promises to maintain the property, pay taxes, or otherwise fulfill the obligations associated with ownership of the property.

g) Registration details

The gift deed should include the details of the registration, including the date and time of registration, the Sub-Registrar of Assurances, and the registration number.

h) Signatures

Finally, the gift deed should be signed by the donor and the donee, as well as two witnesses. The signatures should be witnessed by an authorized person, and the gift deed should also include the date of signing. In India, a gift deed is a legal way to give someone else your property. It can also help you save money on taxes. If you gift your property to close family members, you don't have to pay tax on it. The law, specifically the Indian Income Tax Act, 1961, has a list of family members you can gift to without paying tax. This list includes your parents, spouse, siblings, kids, and direct ancestors and descendants. If you give your property to any of these family members, it counts as tax-free income. So, using a gift deed can help you save money, especially if your property's value has increased a lot over time. Without a gift deed, if you sell such a property, you might have to pay a lot of money as capital gains tax.

Agreement & Contract

How to Draft an NDA: Step-by-Step Guide

A Non-Disclosure Agreement (NDA) is one of the first contracts that must be signed when parties begin a business partnership with one another to avoid the disclosure of any sensitive, secret, or private information communicated to a party who was not involved in those discussions. An NDA is necessary to avoid misunderstandings, conclusions, interpretations, and misuse of such confidential material. An NDA agreement grants the parties the legal right to keep their company's sensitive information private. It forbids the party(s) receiving the information from misusing the sensitive information given, and in the event of a violation, the parties will experience legal ramifications. NDAs can be unilateral and bilateral. It can be between more than two parties as well.

By agreeing to an NDA, the party receiving confidential information promises to use it only as authorized and to keep it secret from third parties. In case the receiving party violates the terms, there is usually a course of action to take. NDAs frequently provide remedies for a breach of contract. As a result, this contract serves as a powerful deterrent due to the possibility of legal action on the side of one party in the event that the other party breaches the agreement.

Parties in NDA

In an NDA, there are two parties: the Disclosing Party, who discloses sensitive or secret information, and the Receiving Party, who receives the sensitive information.

Difference between NDA and Confidentiality Agreement

Even after signing an NDA, the disclosing party will fail to protect its private information. Signing an NDA is not sufficient on its own. Due to the lower level of secrecy required, an NDA differs from a confidentiality agreement. Unlike a confidentiality agreement, which requires parties to take proactive measures to prevent information leaks, an NDA prohibits parties from disclosing personal or private information. Second, whereas NDAs are employed in cases involving third parties or new businesses, confidentiality agreements are more frequently used in employment or personal circumstances. Finally, NDAs are used when there is a unilateral requirement to keep information private, whereas Confidentiality Agreements are used when there is a bilateral or multilateral disclosure of private information.

Benefits of an NDA

Confidential information is protected by non-disclosure agreements.
An NDA enables the creator of a new concept or service to retain ownership while protecting it.
Such secret agreements clearly state sensitive information and should not be disclosed.
All parties can protect their trade secrets when a business partnership is created.
The data is safeguarded for patent registration when a company receives funding.

How to draft an NDA

The company may be held accountable if the company's NDA is unclear or incomplete. The NDA must specify which parties have access to confidential information and set forth the terms and conditions of the contract to protect both the party providing the confidential information and the party receiving it.

Step 1: Define the scope/purpose of NDA. For what purpose is this NDA drafted? What data is considered strictly confidential? A catch-all clause is frequently included in NDAs to ensure that any information that a "reasonable person" would consider should be kept confidential is maintained that way.

Following the typical recital clauses, the definition clause is one of the first clauses in the NDA. In addition to other things, it needs to say who is receiving and sharing the information and what is considered confidential. The definition of Confidential Information may be more detailed depending on the details of the parties' agreement.

Step 2: Outline the obligations of each party. What should be done to protect the privacy of the party receiving the information? How do they plan to avoid unauthorized access?

Step 3: Jot down a list of possible exclusions. When should a party reveal a party's sensitive information? The employment of subcontractors and legal proceedings are two instances where disclosure may be necessary.

This clause may have additional conditions depending on the nature of the agreement and the information disclosed. When NDAs are signed alongside employment agreements, employers may ask employees to agree to a non-solicitation and non-compete clause.

Step 4: Decide a duration that is the term of the agreement. Although the receiving parties typically demand a time limit, the revealing parties may wish the arrangement to last indefinitely. There should be no question regarding the length of confidentiality; both parties' interests must be considered while setting the term. Post-termination obligations and the return of confidential information should also be a part of the NDA.

Step 5: Describe the consequences. Will a violation result in the severance of a business relationship or employment? Can the non-breaching party file a lawsuit for damages or even an injunction? Clauses regarding equitable remedies should be mentioned.

Step 6: Include the boilerplate clauses such as Governing law & jurisdiction, notices, severability, assignment, waiver, indemnity, amendment,

The way NDAs are created, assessed, and negotiated has been fundamentally altered by artificial intelligence (AI), and the technology is surprisingly easy to use. Elements of these agreements could not previously be "written" using cutting-edge legal technology. An AI-powered contract negotiation tool can now produce reviewed entirely and negotiated contracts using the most modern methodologies created by legal experts and artificial intelligence linguistic researchers.

Conclusion

The essential provisions of an NDA can occasionally be included in contracts as a confidentiality clause in place of an NDA. This confidentiality clause is added to the boilerplate or list of provisions that are present in every contract. NDAs are also used in a wide range of industrial settings. They can be a part of employee contracts, settlement agreements between parties to a legal dispute, contracts relating to intellectual property, etc. They are not just utilized when businesses deal with one another. NDAs are hence crucial to any transaction.

Agreement & Contract

Sale Deed Drafting: Take utmost care before registry

Becoming an owner of your dream house was and is one of the top most wishes of any individual’s life. Afterall, the wiser people have said and still say – a self-owned house is a matter of one’s prestige and social security. However, buying a property (flat or floor or piece of land with or without construction) is slightly complicated, especially when it is your first transaction as a buyer. Besides the huge sums of money, several documents having legal bearing are required to successfully complete the transaction. An important point to remember here is that once you register the purchase document with the local or district office of the designated government authority, you become the first or second or nth owner in the sale chain. For your information, the zeroth owner is generally referred as the original allotee of the property.

Out of the long list of documents that are required for buying a property, Sale Deed is one of the most important legal documents that the buyer and seller must execute/register in the district sub-registrar’s office to formally complete the transaction. Before we move forward, let us understand the definition of a sale deed.

What is a sale deed and why it is important?

A sale deed is a legally binding agreement between the buyer and seller of the property that enables a seller to transfer the legal right and title of his or her property to the buyer. By executing this document or in other words, registering a sale deed in the district sub-registrar office, buyer(s) becomes the new owner of the property. Once registered successfully, seller(s) no longer remain the owner(s) of the property. Additionally, the heirs and legal representatives of the seller(s) no longer have any right or claim over the property.

ALSO READ: Know Various Aspects About The Gift Deed & Stamp Duty

We must also understand several points as mentioned below that are extremely important from the property buyer’s perspective:

Seller(s) is referred as a Vendor in a sale deed
Buyer(s) is referred as a Vendee in a sale deed
Sale Deed has details of buyer, seller and witness – full name, address, age, pan number and aadhaar number
Sale deed also includes detailed description of the property that is being sold or bought
It is mandatory to register a sale deed with competent government authority to complete the transaction and is legally binding
Sale Deed document is drafted by a qualified property lawyer or advocate
Sale Deed document is printed on a stamp paper
Stamp duty and property registration fee is paid by the buyer to the state government where the property is located for getting the stamp paper from the competent authority
Sale deed has details of total amount paid by the buyer to seller for buying the property
Sale deed includes details of all the payments made (including TDS on property and stamp duty) by the buyer to the seller
Sale deed also has indemnity clause where seller assures the buyer that property is free from any disputes, incumbrances, mortgages or loans and has a clear title
Sale deed also includes assurance from seller to buyer that seller has paid all taxes, charges and loan payments on the property before completing the sale transaction
Sale deed also includes the details of possession of the property under consideration

ALSO READ: Rates Of Stamp Duty On Gift Deeds Across Some Prominent Cities Of India

Role of a Property Lawyer or Advocate in drafting a sale deed

It is advisable that a property buyer must consider all the above-mentioned points carefully. However, it becomes imperative to draft a sale deed document in a proper manner before it is printed on the stamp paper and presented to competent authority for registration. Ultimately, no buyer would like to entertain post transaction issues due to a loosely worded sale deed agreement. Hence, the role of a property lawyer or advocate becomes extremely important.

Prperty Lawyer: Consult a Property Lawyer from here

A property lawyer is a specialised legal professional who can help the parties involved in drafting a sale deed document appropriately so that rights of the buyer remain protected at any given point post successful registration of a sale deed. A property lawyer, while drafting the sale deed can takes the following steps:

verifies the legal status or title of the property from the office of the competent authority
drafts sale deed document aptly based on the information provided by parties involved in property transaction
edits sale deed draft document in case any changes are suggested by parties involved in property transaction
presents final draft of sale deed and takes approval
prints approved sale deed draft on stamp paper
takes appointment from the sub-registrar’s office for registration of the sale deed
presents buyer, seller and witnesses along with all property documents on the date of appointment for execution of the sale deed (usually called as registry)
acts as, only sometimes, as a witness to the property transaction
collects the registered sale deed from sub-registrar’s office and hands it over to the new owner or buyer of the property

The process of drafting a sale deed is surely not simple and having a property lawyer or advocate who is equipped with knowledge of property laws is always advantageous. Any lapses will likely prove costly in the future. Taking advise from a legal expert is a right thing to do.

Download Legalkart app now

Get 5 mins of talk time Free !

LegalKart Apps

LegalKart- Your Legal Advisor App is for general users who need to avail services like consulting a Lawyer on phone, document drafting, getting property verified by lawyers.