The choice is really about when you want to lose control, and the answer has consequences that cannot easily be undone.
| Gift deed | Will | |
|---|---|---|
| Takes effect | Immediately on acceptance | Only on death |
| Can it be changed | Generally no, once accepted | Yes, any number of times |
| Registration | Compulsory for immovable property | Optional |
| Stamp duty | Payable, concessional for close relatives | None |
| Probate | Not applicable | May be required depending on where the will and property are |
| Risk of dispute | Lower, since the donor is alive to confirm it | Higher, contested after death |
Gift
Under Section 122 of the Transfer of Property Act, 1882, a gift is a voluntary transfer of existing property, without consideration, made by the donor and accepted by the donee during the donor's lifetime. For immovable property, Section 123 requires a registered instrument attested by two witnesses. Acceptance is essential; a deed executed and never accepted or acted upon is vulnerable.
A gift is ordinarily irrevocable. Section 126 permits revocation only where the parties agreed in advance on a specified event not depending on the donor's will, or on the grounds on which a contract may be rescinded.
Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 allows a Tribunal to declare a transfer void where a senior citizen gifted property subject to a condition that the transferee would provide basic amenities and care, and the transferee fails to do so. If you are gifting property to a child and relying on being looked after, write that condition into the deed. Without it on paper, Section 23 is much harder to invoke.
Will
Revocable, private during your lifetime, costs nothing in stamp duty, and lets you keep full control and the ability to change your mind. The trade-off is that it takes effect at the moment you are no longer there to explain it, which is precisely when disputes start.
How I usually frame the choice
- Gift where you genuinely want the transfer to happen now, the relationship is settled, and you do not need the property for your own security.
- Will where you want flexibility, or where your circumstances may change.
- Consider a gift with reservation of a life interest, which transfers ownership while reserving your right to reside in and enjoy the property for life. It is a middle path that is under-used.
- If in doubt, make the will now. You can always execute a gift later; you cannot easily undo one.