Difference Between Sale and Gift?

A gift deed is a legal document used to transfer ownership of property without any monetary consideration and as a voluntary gift from one party to another. However, a sale deed is a legal document used to transfer ownership of property in exchange for a specified monetary amount, representing a sale transaction. If you ask me gift deed or sale deed which is better, I would say a gift deed. It attracts less tax and is a gesture of goodwill. There are several other differences between the two and here are some of them:

What is the gift deed and sale deed difference?

Some of the important differences between gift deed and sale deed are:

Gift Deed	Sale Deed
Property is transferred without monetary gain, often for gifting or inheritance purposes.	Property is sold for a predetermined price, allowing the seller to realise a monetary gain.
Potential for gift tax or income tax for the recipient; the donor bears no tax burden.	Capital gains tax may apply to the seller, but not typically to the buyer.
Lower stamp duty costs compared to sale deeds.	Higher stamp duty costs based on property value, affect the buyer.
Simpler legal process; less stringent documentation is required.	Involves a more comprehensive legal process and documentation.

Now, as per your requirements, you can choose which deed suits you the best.

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Can gift deed be revoked? Can gift deed be challenged in court? What is the difference between the registration of agreement of sale and sale deed? What is gift deed of immovable property?

The gift deed vs sale deed is quite common. But it should be noted that they are not the same. In a sale deed, the property gets transferred in exchange for something, be it money or other things. On the other hand, in a gift deed only the property gets transferred without getting anything in return. This is the major difference between sale and gift under transfer of property act but yes there are other factors as well. Stamp duty is also higher for a sale deed than a gift deed. 

How to distinguish between sale and gift deed?

Here are some differences between a sale deed and a gift deed-

Aspects	Sale Deed	Gift Deed
Monetary exchange	A monetary exchange or other exchange is involved in a sale deed	Nothing is exchanged to transfer the property in a gift deed
Legal obligations	Both the buyer and seller have to abide by the terms or legal obligations of the other	No legal obligations exist on the part of the recipient
Registration and Stamp Duty fee	Requires registration with the relevant authority and is subject to stamp duty	Requires registration with the relevant authority and may be subject to stamp duty
Tax	The buyer is responsible for paying capital gains tax	Both the donor and recipient have to pay gift tax, income tax or other taxes as well

So to answer sale deed vs gift deed which is better, I feel it depends on the terms and conditions of the parties only. Gift deeds cost less, so yes, for me, it is better than the other.

Get your sale or gift deed drafted under NoBroker’s legal guidance

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What is Sale Deed Number? What is Registered Sale Deed? Can gift deed be revoked What is Gift Deed? Can gift deed be challenged in court?

If you are an experienced customer, you can assume it from the name. While a sale deed is signed to formally transfer ownership of property, a gift deed is signed when the same property needs to be gifted. What defines a gift or sale may be the subject of considerable misunderstandings. So let me guide you in brief about sale deed vs gift deed.

Know about a sale deed and a gift deed from the experts at NoBroker. Draft your sale agreement via NoBroker for a hassle-free process.

What is the difference between sale and gift in property law?

The following points will clear your doubt about the sale and deed difference you must be aware of.

Gift	Sale
A gift's donor does not get paid, unlike a sale document.	The person who is giving the property gets compensation for the property deal.
The giving of real estate among relatives is exempted from stamp duty in various states.	The stamp duty rates are higher for sale deeds.
Gifts of real estate are not subject to this tax. This is the main point about what is the difference between gift and sale.	Capital gains tax is due on the sale.
The business will probably only be passed down through a lifelong gift or inheritance to the closest family members. This strategy might not be acceptable for everybody, specifically if retirement income is required, as the firm owner won't typically receive any revenues from the transfer.	The buyer and seller, as well as the date of the sale, are identified in a buy-sell agreement. It's common for the buyer to get life insurance on the owner's life or to set aside funds to be used as a down payment on the acquisition when the property is actually sold.

I hope you understood sale deed vs gift deed difference.

Read More: What is sale deed registration? What is a gift deed of immovable property? How to make a gift deed?

There is misinformation online about the transfer of property. Individuals often assume gifted properties don't need to be registered. They are wrong. Despite the difference between sale and gift under transfer of property act, all properties need to have legitimate documentation for their verification. Need expert legal help with Scrutiny of sale deed, gift deed or more Check out NoBroker Legal Services today! If you need extra help while looking for buyers for your property, check out NoBroker Seller Assist Plans  Difference between sale deed and gift deed in India? The biggest difference between these two is the basic objective of property transfer. Gift Deed : The gift deed is created for properties that are to be gifted from the owner to a third party. Certain states offer a concession on stamp duty if the property is being gifted to a blood relative. The gift deed contains essential information about the conditions of gifting property.

• Transfer of property ownership
• Details of the existing property owner or donor
• If the property is being transferred without consideration
• If it is a voluntary transfer with free consent

Whether the property is being accepted by the donee as a gift or not. Sale deed :  The sale deed is made when the property owner sells his immovable property to a buyer in exchange for money or goods. Registering a sale deed has been made compulsory under section 122 of the Transfer of Property Act, 1882. Along with the sale deed, the seller is liable to produce the following documents :

• To disclose material defects[S.55(1)(a)]
• To produce title-deeds [Section 55 (1)(b)]
• To answer questions as to Title [Section 55 (1)(c)]
• To execute a proper conveyance [Section 55(1)(d)]
• To take care of property and title deeds [Section 55(1)(e)]
• To pay outgoings [Section 55 (1)(g)] 

Similarities : Under the current property transfer laws, both the sale deed and gift deed need to be signed with at least two witnesses. Both documents are widely accepted in a court of law. Only signed documents are considered to be complete. I hope you have a clear perspective about the difference between sale and gift under transfer of property act. Read more : How to find deed number in land paper? How can I get sale deed online? What is the validity of sale deed registration? How to take Deduction on Gift Deed Registration Charges?

Hi there,

It was not long ago when I came to know about these terms. My grandfather died 2 years ago and had transferred his home to my father as a gift deed. That is when I came to know what a gift deed is and how it is different from a sale deed. Understanding the difference between sale and gift is utterly important, not just from the business perspective but also from a general perspective. You must be aware of real estate terms like these so that you are prepared to face unforeseen circumstances in the future. So, I am going to walk you through the meaning of sale and gift deed so that you understand how they are different from each other.

Need help in verifying your property documents and drafting sale deeds? Get in touch with the legal experts of NoBroker and get your legal work done without any hassle. What is the difference between gift deed and sale deed? Sale:

The owner may choose to sell the company to a third party. A business sale gives financial resources to the leaving owner (or his or her family) to satisfy continued income needs during retirement or after the owner's death or disability. A buy-sell agreement is used to memorialise the potential sale of a business. However, because it is a legally enforceable instrument subject to state laws, it should be drafted by a local attorney who specialises in business succession planning.

Gift / Inheritance:

Close family members will most likely be the ones to receive the business as a lifetime gift or inheritance. Because the business owner would typically not get any proceeds from the sale, this option may not be ideal for everyone, particularly if retirement income is required.

The greatest option for your company - whether it's a sale, a gift, or a combination of the two – will be determined by a number of factors and your unique circumstances. Planning ahead of time and engaging with a business succession attorney to put the plan in writing will go a long way toward making your vision for the future a reality.

A gift deed, like a sale deed, includes information about the property, the transferrer, and the beneficiary. A gift deed, on the other hand, instead of a selling consideration, permits you to transfer ownership without exchanging money.

I hope I was able to make you understand the difference between sale and gift. Do tell me if I did justice to your question in the comments.

Read More: How to Make Gift Deed? Can Gift Deed be Revoked?