Gift Deed and Stamp Duty

I  bought a property in the name of my sister-in-law (single name). The entire payment of the loan and other related payments have been made by me. She stays abroad. Now I want to transfer the property in my name by way of gift. What is the procedure? Can she give a power of attorney (PoA) to my brother who can come and transfer the same? Is it legally correct to transfer the gift agreement through my brother?
—Seshadri S
Section 123 of the Transfer of Property Act, 1882 reads as follows: “For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery. Such delivery may be made in the same way as goods sold may be delivered.”

Your sister-in-law may either execute a gift deed, gifting the said property to you or execute a special or specific PoA in favour of your brother or any other person, specifically granting the power to your brother or such other person to gift the property to you and to execute the applicable documents and admit and lodge the same for registration to give effect to the gift of the property in question. It may be noted here that a general PoA will not be sufficient and the attorney will not have the requisite power to execute a valid gift deed of such property.
In one particular matter, it was held by the Punjab and Haryana High Court that in case a gift deed is executed, not by the donor himself but by a third person as his attorney, the power to gift the property must emanate from the donor. It must be noted that one of the reasons given by the court for deciding that the gift deed in question in that particular case was not valid was because the PoA did not specify the name of the person to whom the property was intended to be gifted to by the owner. Thus, it would be advisable that your sister-in-law specifies her intention to gift the said property to you by specifically mentioning your name in the PoA that she will execute in favour of your brother.
However, a PoA that grants to the attorney the power to gift immovable property to a particular person must be registered. In certain states in India, the presence of the maker of the PoA may be required at the office of the registrar or sub-registrar as the case may be.
It may be noted that stamp duty will be payable on the gift deed. In certain states, the stamp duty is payable on a gift deed when the gift is being made to a family member (husband, wife, brother or sister) or any lineal ascendant/descendant of the donor (person making the gift) is less than that payable on a gift deed when the gift is made to a person other than those named above. So this benefit won’t be available in your case as the donor is your sister-in-law (not a direct family member).
Shabnum Kajiji is a partner with Wadia Ghandy & Co. Advocates, Solicitors and Notaries.