Can a gift be revoked or suspended?
A gift can be revoked if the donee fails to adhere to the conditions laid down by the donor at the time of drawing up of the gift deed
Agift is one of the many ways by which the ownership of an existing movable or immoveable property can be transferred voluntarily and without any monetary consideration. The person who gifts the property is called the donor, and the person who receives the gift is the donee. In order to constitute a valid gift, the gift must be accepted by the donee.
Once a property has been gifted to the donee, the donor cannot subsequently revoke or cancel the gift. A unilateral cancellation of a valid gift is invalid. However, certain grounds for revocation of a gift are permitted in law. A gift may be suspended or revoked on specified grounds.
I f t here i s an agreement between the donor and the donee at the time of drawing up the gift deed that in future is suspended or revoked due to some reason, then the donor can lawfully revoke the gift at that point in time. However, such a specified event should not depend upon the will of the donor. In other words, such an event should be beyond the control of the donor.
For example, ‘A’ decides to gift his property to ‘B’ on the condition that ‘B’ has to maintain ‘A’ till the death of ‘A’. In this illustration, the condition for revocation is specified right at the outset and A’s power of revocation is in clear and unambiguous terms. ‘B’ has also agreed to the condition at the time of accepting the gift.
In the event of ‘B’ failing to maintain ‘A’, ‘A’ may validly revoke the gift and take back the gifted property from ‘B’ if the latter fails to look after him, because the gift deed provided for the power of revocation to ‘A’ and the gift has been made subject to the specified condition that ‘B’ has to maintain the donor ‘A’.
A gift which is a voluntary transfer of property can be revoked by the donor if his consent has been obtained by fraud, undue influence, misrepresentation or coercion. For exam- ple, ‘A’ who was the owner of agricultural land wanted t o av a i l a loan against his property.
His nephew ‘B’ convinced ‘A’ to execute a power of attorney in his favour for the purpose of getting the l oan and completing the required formalities for it. ’ A’ was around 80 years old and agreed to do so. However, ‘B’ under the pretext of getting a power of attorney signed by him, got a gift deed instead. Therefore, ‘A’ revoked the gift later as his consent was obtained by fraud.
Apart f rom t he g rounds mentioned above, a valid gift once made is irrevocable and the transfer of a property by way of a gift is as complete and binding on the parties as by any other form of transfer. erty (wherever situated).
My brother booked a flat but before he could complete the agreement formalities, he went to USA. I therefore signed the agreement in my name, took a loan for his flat and eventually registered the flat in my name as all bank documents and agreements are in my name. I will have to transfer the house in the brother’s name some time in the future. If I register it again in his name, the exercise will attract huge registration charges. Is it possible that I gift the flat to his three-yearold daughter to avoid paying registration charges?
— Sangeet Kapoor Even the gift document in your niece’s name will need to be stamped and registered. Various states have lower stamp duty rates for the gifts made to specific relatives and you can take advantage of that. Moreover, since she is minor, the gift has to be accepted by her guardian. In any case, the loan will need to be repaid to the bank if you wish to gift the property. If the property is to be owned by a minor, it will not be possible for her or your brother to get a loan for it.
I have two properties. One is selfoccupied and other is let-out. I have taken housing loan to purchase the second property. I had the calculation of my income tax after deduction of interest and principal amount under section 24 as loss from house property after taking rent as income. My employer refuses to give deductions on let-out property and is saying that deduction is admissible on self-occupied property. Please clarify whether my employer is right or not?
— Rajiv Trikha In case the result of income from house property is negative, whether in respect of self-occupied property or let out, the employer has to take into account such loss under the head ‘income from house property’ before deducting tax at source from Salary as per Section 192(2B) of the Income Tax Act, 1961 read with rule 26B. Just make sure that the statement of income sent to your employ- er (taking the loss under the head “income from house property” is verified as follows at the end.
Form of verification I, …….(name of the assesee ), do declare that what is stated above is true to the best of my information and belief.
Once you do this the employer has no option but to take the loss into account while calculating the tax deducted from your salary. You can file an official grievance with your HR department if they refuse to follow the provisions of the IT law.
A unilateral cancellation of a valid gift is invalid and only certain grounds for revocation of a gift are permitted under the law