Explained: Difference between gift deed, will, and sale deed

Under the Indian property law, the transfer of ownership of immovable property can take place through various legal methods. There are 3 most common modes of property transfer in India: Gift deed, Sale deed, and Will. Let us understand the difference between the two.Sale deedDuring a Sale deed, the property is formally transferred by one individual to another and involves the purchase of the property based on the market rate or the amount mutually agreed upon. It is a legal document that confirms the transfer of property from seller to buyer.The document includes details like price, parties involved, description of the property, and possession date. The registration of sale deeds is mandatory for the property transfer to be legally valid. Once registered, it offers complete legal protection to the buyer.The stamp duty on sale deeds is applicable on the basis of the gender of the buyer and the state the property is in.Gift deedTransfer of property in the form of a gift deed does not involve any purchase and is usually given out of love, admiration, or goodwill. It is common between family members, usually from parents to children. The transfer is effective immediately during the donor’s lifetime.In India, the Stamp duty on gift deeds is dependent on the state. Some states even offer concessions when property is transferred within the family. For example, in Karnataka, any property above Rs 45 lakh attracts a stamp duty of about 5% of the market value; however, it is substantially less if the person giving the property is a spouse, child, or sibling.Here, registration of property is recommended so that it cements the legal validity of your ownership and protects you against claims by other family members.However, a gift deed has its own legal conditions; the gift deed must be made voluntarily. The donor must be competent to contract the deed, and the donee must accept the gift during the donor’s lifetime. If the property value exceeds Rs 50,000 and the recipient is not a close relative, it may attract income tax.WillA 'Will' is a legal declaration made by a person, the testator, specifying how their assets and property should be distributed after their death.Unlike a sale deed or gift deed, which takes effect immediately during the testator's lifetime, a will becomes effective only after death and can be revoked or amended by the testator at any time while he/she lives. Any person who has attained the age of 18 years and is of sound mind can make a valid will, and a person of unsound mind can also make a will during their lucid interval. The will can name any person or corporation as a beneficiary.Unlike a sale or gift deed, no stamp duty or income tax is applicable on inheritance; tax applies only when the person generates income from selling or renting the property.All 3 modes of property transfer serve their own respective purposes, but the transfer requires attestation of at least 2 witnesses. What is necessary is drafting the deed with legal guidance, so that future complications can be avoided.