List of Blood Relation for Gift Deed

Transferring property within a family is a common practice in India. Parents often transfer assets to children, grandparents to grandchildren, or siblings gift property to each other. When such transfers are made through a gift deed, understanding how the law treats blood relations becomes important. 

Gifts to blood relatives are generally tax-free and simpler in documentation, but certain conditions must be fulfilled to ensure legality and exemption under the Income Tax Act and the Transfer of Property Act.

This article explains the meaning of a gift deed, who qualifies as a blood relative, the process of transferring property through a gift deed in blood relation, and the tax and legal implications of such transfers in India.

Meaning of a Gift Deed

A gift deed is a legal document through which one person voluntarily transfers ownership of movable or immovable property to another person without receiving any money or consideration.

Under Section 122 of the Transfer of Property Act, 1882, a gift is defined as the transfer of property made voluntarily and without consideration by one person, called the donor, to another person, called the donee.

The transfer must be made out of love and affection and must be accepted by the donee during the lifetime of the donor. Once accepted and registered, the gift deed becomes legally binding and irreversible.

Importance of Gift Deed in Blood Relation

A gift deed in blood relation helps in smooth transfer of property among family members without disputes or income tax burden. Since it is executed between relatives, it is also exempt from stamp duty or tax in some Indian states. Moreover, property transfer through a registered gift deed ensures clear ownership, avoids future conflicts, and provides proof of the transaction.

Such deeds are also beneficial in estate planning, helping families transfer assets during their lifetime while avoiding lengthy succession procedures after death.

Who Are Considered Blood Relatives for Gift Deed?

For property transfers, the term blood relation is often interpreted broadly. The Income Tax Act, 1961, particularly Section 56(2)(x), specifies a list of relatives from whom gifts are not taxable. These are considered blood relations for legal and tax purposes.

Immediate Family Members

• Father
• Mother
• Son
• Daughter
• Husband
• Wife

These are the closest blood relations. Gifts between them are completely exempt from tax. For instance, a father transferring his house to his son or a wife gifting jewellery to her husband is fully exempt.

Lineal Ascendants and Descendants

• Grandfather
• Grandmother
• Great Grandfather
• Great Grandmother
• Grandson
• Granddaughter
• Great Grandson
• Great Granddaughter

These are considered lineal relations. Property transfers among them through gift deeds are also exempt from income tax.

Siblings and Their Spouses

• Brother
• Sister
• Brother’s Wife
• Sister’s Husband

Siblings and their spouses are part of the close family circle, and gifts among them also enjoy exemption. For example, a sister gifting a plot to her brother or a brother transferring shares to his sister’s husband would not attract tax.

In-laws and Extended Family

• Father-in-law
• Mother-in-law
• Brother-in-law (spouse’s brother)
• Sister-in-law (spouse’s sister)
• Son-in-law
• Daughter-in-law
• Grandfather-in-law
• Grandmother-in-law

These relations are not directly connected by blood but are recognised under the Income Tax Act for gift exemption purposes.

Relatives by Marriage

Spouse of any of the persons mentioned above

This means if someone gifts property to a relative’s spouse, such a transfer is also considered within family limits and remains exempt.

Property Transfer in Blood Relation

A property transfer in blood relation can be done through a registered gift deed or a transfer deed. It must be executed voluntarily, out of love and affection, and without any monetary consideration.

Steps for Transfer of Property to Blood Relation

1. Drafting the Gift Deed: The first step is preparing a legally valid gift deed that clearly mentions details such as property description, relationship between donor and donee, statement of voluntary transfer, and acceptance by the donee.
   
2. Stamp Duty and Registration: The deed must be printed on stamp paper of prescribed value and registered under Section 17 of the Registration Act, 1908 at the sub-registrar’s office.  Many states offer concessional stamp duty for transfers within blood relations. For example, Maharashtra, Delhi, Haryana, and Uttar Pradesh have reduced stamp duty for gift deeds among relatives.
3. Acceptance of Gift:  The donee must accept the gift during the donor’s lifetime. Acceptance can be shown by taking possession of the property or by an explicit statement in the deed.
   
4. Registration Procedure
   • Visit the sub-registrar’s office with both parties.
   • Present identification and property documents.
   • Pay the registration charges.
   • Obtain the registered copy of the gift deed.

5. Mutation of Property Records: After registration, property records must be updated in the municipal or local authority’s records to reflect the new owner’s name.
   

Stamp Duty on Gift Deed in Blood Relation

The amount of stamp duty on a gift deed varies from state to state. In many states, gift deeds executed between close relatives are charged at a nominal rate or are exempt altogether.

Below are examples of common practices:

• Maharashtra: Stamp duty is ₹200 for gifts to close relatives such as spouse, parents, siblings, or children.
• Delhi: Exemption or reduced duty for blood relatives.
• Haryana: Concession in stamp duty when the property is transferred to a family member.
• Karnataka: Nominal duty when the transfer is between parents and children or spouses.

It is always advisable to verify the applicable rate with the local sub-registrar’s office before executing the gift deed.

Tax Implications of Gift Deed in Blood Relation

Under Section 56(2)(x) of the Income Tax Act, gifts received by an individual from non-relatives are taxable if the total value exceeds ₹50,000 in a financial year. However, gifts received from blood relatives are completely exempt from tax, irrespective of the value.

When Gifts Are Tax-Free

• Received from relatives (as defined under the Act).
• Received on the occasion of marriage.
• Received under a will or inheritance.
• Received from local authorities or registered charitable institutions.

When Gifts Become Taxable

If a property or amount is received from a person who is not a relative and its total value exceeds ₹50,000 in a year, the entire amount becomes taxable under the head Income from Other Sources.

Example:

If an individual receives ₹75,000 as a gift from a friend, the entire ₹75,000 is taxable. But if the same amount is received from a brother, it is fully exempt.

Clubbing of Income

Although the gift itself is exempt, any income generated from that gift may be taxable. For instance, if a husband gifts ₹10 lakh to his wife, the amount is not taxed. However, if the wife invests that amount in a fixed deposit, the interest earned will be taxed in the husband’s hands under clubbing provisions.

Difference Between Gift Deed and Transfer Deed in Blood Relation

Advantages of Property Transfer Through Gift Deed in Blood Relation

1. Tax Exemption: Gifts among blood relatives are completely exempt from income tax.
2. Legal Validity: A registered gift deed is valid proof of ownership.
3. Reduced Stamp Duty: Lower or nil stamp duty for transfers within family.
4. Avoidance of Disputes: Transparent documentation reduces chances of conflict.
5. Easy Estate Planning: Ensures smoother succession and avoids future litigation.

Legal Provisions Governing Gift Deeds

1. Transfer of Property Act, 1882 – Section 122 to 129: These sections deal with the definition, registration, acceptance, and revocation of gifts.
2. Registration Act, 1908 – Section 17: It mandates registration of immovable property gift deeds.
3. Income Tax Act, 1961 – Section 56(2)(x): It governs taxability and exemptions of gifts received from relatives or others.

Conclusion

A gift deed in blood relation is one of the most efficient and legally secure ways to transfer property within a family. It helps in smooth succession planning, saves taxes, and avoids unnecessary disputes. However, the transfer must be voluntary, registered, and between legally recognised relatives to claim exemptions under the Income Tax Act.