Gift is a transfer of property from its owner to another person without monetary consideration. The deed should state that the gift is being made on the sole consideration of love and affection or on the sole consideration of creating an endowment for religions and charitable purposes. There shall not be any mention about monetary transactions between the parties. If there be any suspicion that a gift is made for consideration of creating an endowment for religions and charitable purposes. There shall not be any mention about monetary transactions between the parties. If there be any suspicion that a gift is made for considerations not specified above it will not be treated as a gift deed.
The person who makes the gift is called the donor and the person in whose favour the gift is made is called the donee. Since, the law provides that the donation is not complete unless it is accepted by the donee, the gift deed must say that the donee has accepted the gift. Gift can be made unilaterally. If the donee is added as a party in the gift deed, the donee also shall sign in acceptance. Gift may be made in favour of any person. It can be made in favour of minors and also in favour of persons of unsound mind. If the donor of the gift desires that the property may be managed and the proceeds of the gift may be made over to the ultimate beneficiary he may create a trust in favour of the beneficiary and appoint a person conferring on him the necessary powers to manage the properties. Such person is called the administrator. Where the gift is made through a will, such administrator may take over the management of the gifted properties without the intervention of the court. Such administrator occupies the position of a trustee.
A gift may be made in favour of any trust. As soon as the gift is made it is the trustees of a trust who get possessed of the gifted property which is hereinafter called the trust property. After the gift deed is executed by the donor even with a recitation that the donee has accepted a gift, it is always not necessary that the beneficiary shall accept the gift. If he finds the gift to be onerous he may refuse to accept the gift in which case the property remains with the donor only. The donee of the gift if he proposes to accept the gift he shall accept the entire gift together with all liabilities which are attached to it. It is not open to him to accept a part of the gift which is beneficial to him and refuse to accept the other part which is onerous.
The expression onerous gift means, it is burdened with liabilities. If the donee does not want to accept the liabilities either in full or in part he shall refuse the entire gift. For e.g., if the donee accepts attached properties he should pay the creditor the amount for which the property is attached. If the property is subject to certain charges such as maintenance payable to the wife of the donor throughout her life, the donee shall not only pay the maintenance as it stood on the date of the gift but also such amount of increased maintenance the court may order in future. If the management is too difficult and hard and the return obtainable from the gift is not sufficient, the donee may refuse to accept a onerous gift. But if the donee accepts the gift, he cannot subsequently surrender it to donor’s successors.
Gift is a compulsory registerable document. If it is not either duly stamped or registered the transfer of property contemplated under the gift deed does not take effect nor can it be proved in any court of law.
If there is any statutory prohibition against transferring any property without the permission of some specified authority, the gift made without such permission shall be treated as having never taken effect. That was the case under section 47 and 48 of A.P. (Telangana Area) Tenancy and Agricultural Lands Act. Law does not recognize oral gifts, the only exception to this rule is the gift announced in favour of the bride by her father at the time of actual celebration of the marriage. Any such oral gift is made after the marriage will not take effect unless it is made in writing and registered. Islamic law permits oral gifts but such gifts may not exceed 1/3 of the property held by the donor.