Difference Between Gift Deed And Will?

When it comes to transferring property in India, two common legal tools often cause confusion, Gift Deed and Will. Both allow you to pass on your assets, but they differ in timing, revocability, registration needs, and tax implications.

So, how do you choose between the two? In this article, we break it down in simple terms, with real-life case laws, legal provisions, and expert-backed insights to help you make the right decision.

What is a Gift Deed?

A Gift Deed lets you transfer property to someone you care about without taking any money in return. 

Legality:

• Comes under Section 122 of the Transfer of Property Act, 1882
• Must be registered (especially for immovable property)
• Done voluntarily, no force, no fraud
• Cannot be taken back easily once registered

Why Some Prefer Gift Deeds:

• Ownership is transferred immediately
• Helps avoid future disputes
• Can be part of tax planning
• Often used when gifting to children, siblings, or spouse

What You Should Watch Out For:

• Stamp duty applies, and it can be heavy in some states
• Once done, it’s mostly irreversible

Takeaway: One of the client’s father didn’t go ahead because he wanted to retain control during his lifetime, which a gift deed doesn’t allow.

What is a Will?

A Will is a document that says what should happen to your property after your death. 

Legality:

• Covered under the Indian Succession Act, 1925
• Becomes valid only after death
• No stamp duty required
• Can be registered (optional, but useful)

Why Many Prefer a Will:

• You stay the owner for life
• You can change or cancel it anytime
• Works well if you’re planning for multiple heirs

What to Keep in Mind:

• Can be challenged in court
• May require probate in some states like Maharashtra and West Bengal
• Needs to be properly witnessed to avoid disputes

Takeaway: The flexibility and control were exactly what our client’s mother wanted, especially since she may revise her decision later.

Gift Deed vs Will: Key Differences

Feature	Gift Deed	Will
When It Takes Effect	Immediately after registration	After death of the person writing, it
Can Be Revoked?	Not usually	Yes, any time before death
Registration	Mandatory for immovable property	Optional
Stamp Duty	Yes, state-wise	No
Legal Disputes	Less common	More likely
Tax Rules	Gifts from relatives are tax-free	Not treated as income, hence no tax
Ownership Transfer	Immediate	Deferred

Real Court Cases That Opened Eyes

• K. Balakrishnan v. K. Kamalam (2004): The court ruled that if a document transfers property while the giver is alive, it’s a Gift Deed, not a Will, even if titled otherwise.
• Renikuntla Rajamma v. K. Sarwanamma (2014): Even though the document was called a “Will,” the property was transferred immediately, so the court declared it a Gift.
• Gurdev Kaur v. Kaki (2007): If possession and rights are passed right away, it’s a gift, no matter what the document is called.

Tax Rules 

If You’re Using a Gift Deed:

• Gifts from family (spouse, siblings, parents) are not taxed
• Gifts from non-relatives above ₹50,000 can be taxed
• Stamp duty is state-specific and must be paid

If You’re Using a Will:

• No income tax applies
• No stamp duty or registration charges
• Property received under a Will is not treated as income

Can You Change Your Mind Later?

• Gift Deed: Once signed, stamped, and registered, it’s very hard to cancel, unless both parties agree or there was fraud.
• Will: You can rewrite, modify, or cancel your Will anytime. You can even add small updates using a document called a Codicil.
• Tip: This flexibility is a major reason many people choose Wills, especially in joint families.

What the Lawyer Tell About Registration?

For Gift Deeds:

• Must be on stamp paper
• Needs registration
• Requires signatures from donor, donee, and witnesses

For Wills:

• Can be written on plain paper
• Registration is not mandatory, but helps in proving its authenticity
• Must be signed in front of two witnesses

Do You Need Probate?

A Gift Deed needs no probate, it’s final once registered.

However, in states like Tamil Nadu, West Bengal, or Maharashtra, a will might require probate, particularly if it relates to real estate.

 Advice: Before completing your will, it is essential to speak with a local attorney if your property is located in a state that requires probate.

Gift Deed or Will? 

Situation	Ideal Option
Want to give property during your lifetime	Gift Deed
Want to retain control till the end	Will
Need tax planning	Gift Deed
Need flexibility to change plans	Will
Have a joint family with future disputes	Will (with legal advice)

Final Thoughts

Choosing between a Gift Deed and a Will isn’t just about legal paperwork, it’s about timing, trust, control, and family dynamics:

• Talk to a lawyer, especially if you own multiple properties or expect family disputes.
• Be clear with your intentions, clarity today avoids court battles tomorrow.
• If you want peace of mind now, Gift Deed works.
• If you want to hold on and plan the future, go with a Will.

One can talk to lawyer from Lead India for any kind of legal support. In India, free legal advice online can be obtained at Lead India. Along with receiving free legal advice online, one can also ask questions to the experts online free through Lead India.

FAQs

1. Can a Gift Deed be challenged in a court?

The Gift Deed can be challenged on a few grounds such as fraud, coercion, undue influence, or when the donor did not have disposing capacity at the time of execution. When the Gift Deed is properly registered and accepted, the possibility of a challenge is very low.

2. What legal consequences does non-registration of the Will entail?

Non-registration does not affect validity of the Will in India, although it can be challenged or disputed more during probate. Registration, on the other hand, helps establish authenticity and may prove very helpful in facilitating the legal procedure after the death of the testator.

3. Can a person execute both a Gift Deed and a Will for different properties?

Yes, a person can gift certain properties during their lifetime through a Gift Deed and also make a Will for assets they wish to pass on after death. Both documents must clearly specify which asset goes through which method to avoid overlap.