Law of Registration
The Gift Deed and the Will Distinguished: Transfer Now Against Disposition on Death, and Why a Completed Gift Leaves Nothing for the Will to Operate On
A gift and a will may dispose of the same property to the same person, and the documents may read very similarly. They are nonetheless opposites. A gift is an inter vivos transfer: the donor parts with the property during his lifetime, and once the gift is complete he cannot take it back. A will is testamentary: it transfers nothing while the testator lives, he may sell the property tomorrow or tear the will up, and it speaks only from his death. Every difference in registration, stamp duty, acceptance and revocability follows from that one line, and so does the answer to the question people actually ask, which is what happens when both exist over the same property.
The two compared line by line, and what happens when a gift and a will cover the same property
1. The Gift
Sections 122 and 123, Transfer of Property Act, 1882 122. "Gift" defined. "Gift" is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Acceptance when to be made. Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void. 123. Transfer how effected. For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. |
- It is a transfer, and it takes effect now. Once the deed is registered, attested and accepted, the property has moved.
- Registration is compulsory whatever the value. Section 17(1)(a) of the Registration Act contains no threshold, and Section 123 imposes its own requirement.
- Attestation by two witnesses is an independent requirement, and registration does not cure its absence.
- Acceptance is essential, during the donor's lifetime and while he is capable of giving, and may be express or inferred from conduct such as taking possession or mutation.
- The property must be existing. A gift of future property is void under Section 124.
- Delivery of possession is not essential. The donor may reserve a life interest, as the Supreme Court held in Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445.
2. The Will
Sections 2(h), 62 and 63, Indian Succession Act, 1925, in substance 2(h). "will" means the legal declaration of the intention of a testator with respect to his property which he desires to be carried into effect after his death. 62. Will may be revoked or altered. A will is liable to be revoked or altered by the maker of it at any time when he is competent to dispose of his property by will. 63. Execution of unprivileged wills. The testator shall sign or affix his mark, so placed as to show that it was intended to give effect to the writing as a will; and the will shall be attested by two or more witnesses, each of whom has seen the testator sign or has received from him a personal acknowledgment, and each of whom shall sign in the presence of the testator. |
- It transfers nothing during the testator's lifetime. He keeps the property and the full power to deal with it.
- Registration is optional, by Section 17(2)(b) and Section 18(e), and a will may be presented at any time under Section 27.
- Attestation by two or more witnesses is mandatory, and a will attested by one is void.
- No acceptance is required. The legatee need do nothing during the testator's lifetime, and may disclaim after his death.
- No stamp duty is payable on a will or a codicil.
- It is revocable at any time, by a later will, by a writing executed as a will is executed, by marriage where Section 69 applies, or by destruction with the intention of revoking.
3. The Two Compared
Gift deed | Will | |
Character | Inter vivos transfer | Testamentary disposition |
When it operates | At once, on registration and acceptance | On the death of the testator |
Governing statute | Sections 122 to 129, Transfer of Property Act, 1882 | Indian Succession Act, 1925 |
Registration | Compulsory whatever the value, Section 17(1)(a) with Section 123 | Optional, Sections 17(2)(b) and 18(e) |
Time to register | Four months from execution, Section 23 | At any time, Section 27, and after death under Sections 40 and 41 |
Attestation | Two witnesses, Section 123 | Two or more witnesses, Section 63 of the Succession Act |
Acceptance | Essential during the donor's lifetime; the gift is void without it, Section 122 | Not required; the legatee may disclaim |
Revocability | Only within Section 126, on an agreed event not depending on the donor's will, or on a ground on which a contract could be rescinded | At any time until death, Section 62 |
Consideration | There must be none | Not applicable; a will is not a transfer |
Control in the meantime | The donor parts with the property; he may reserve only a life interest | The testator keeps full power to sell, mortgage or give the property away |
Stamp duty | Payable, ordinarily at conveyance rates, with State concessions for family transfers | None |
Which book | Book 1 | Book 3, with access restricted by Section 57(2) |
Proof in court | No attesting witness need be called if registered and execution is not denied, proviso to Section 67 BSA | An attesting witness must be called; wills are excluded from that proviso |
Probate | Does not arise | May be required under Sections 213 and 57 of the Succession Act |
4. The Two Points of Convergence
The comparison is nearly all contrast, but two requirements are common to both, and they are worth isolating because they are the requirements most often overlooked.
1. Both require attestation by two witnesses. Section 123 of the Transfer of Property Act for a gift, and Section 63 of the Indian Succession Act for a will. In both cases attestation goes to the validity of the instrument, and in both cases registration does not supply it.
2. Both may reserve a life interest to the maker, and in neither case does that make the document something other than what it is. A gift reserving a life interest to the donor is still a completed gift, because the remainder passes now; a will that leaves a life interest to one legatee and the remainder to another is still a will, because nothing passes at all until death.
⚠ A reserved life interest does not make a gift testamentary This is the commonest confusion between the two documents. A donor who executes a registered gift deed but continues to live in the house, take the rents, and pay the taxes has still made a gift, and cannot revoke it, because he parted with the remainder the moment the deed was registered and accepted. The Supreme Court held in Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445 that delivery of possession is not a condition precedent to the validity of a gift under Section 123, and that a donor may reserve to herself the right of enjoyment during her lifetime without affecting the validity of the gift. A testamentary document, by contrast, transfers nothing at all during the maker's lifetime. |
5. When Both Exist Over the Same Property
This is the question that matters in practice, and the answer follows from the timing. A completed gift transfers the property during the donor's lifetime. When he dies, the property is no longer his, and a will operates only on property the testator owned at his death. There is nothing left for the will to bite on.
The sequence | The result |
Will first, then a gift of the same property | The gift prevails. The property passed in the testator's lifetime, and the bequest is adeemed: it fails because the subject matter is no longer part of the estate |
Gift first, then a will of the same property | The gift prevails. The testator had nothing to bequeath, and the will is ineffective as to that property |
Gift executed but never registered, and a will | The will prevails as to that property. An unregistered gift of immovable property transfers nothing, Section 123 with Section 49 |
Gift registered but never accepted, and a will | The will prevails. A gift never accepted during the donor's lifetime is void under Section 122 |
Gift registered but attested by one witness, and a will | The will prevails. The gift is bad for want of attestation under Section 123 |
Two wills over the same property | The later will prevails, whether or not the earlier was registered, Section 70 of the Succession Act |
- Registration of the will confers no priority. Section 48 of the Registration Act has no application to wills, because a will operates only from death and there is nothing to which priority could attach before then.
- Nor does registration of the gift matter to the contest, beyond the fact that registration is what makes the gift effective at all.
- Ademption is the technical name for the failure of a bequest whose subject matter has ceased to form part of the estate, and it is what happens to the legacy when the testator gives the property away in his lifetime.
- A gift may itself be challenged, of course, as void for want of registration, attestation or acceptance, or as voidable for fraud, coercion or undue influence, and if it falls the will may revive in effect.
6. Which to Use
If the maker wants | The instrument |
To transfer the property now, and be unable to change his mind | A gift deed |
To keep the property and decide again later | A will |
To transfer now but continue living in the property until he dies | A gift deed reserving a life interest |
To provide for family members out of his property during his lifetime | A settlement deed, or a gift |
To avoid stamp duty | A will, which attracts none; but he keeps the property and the risk that the beneficiary will have to prove the will |
To avoid a dispute after his death | A registered gift or settlement, completed in his lifetime, which is far harder to attack than a will |
To keep the disposition private during his lifetime | A will, deposited in a sealed cover under Sections 42 to 46 |
The trade off is between certainty and flexibility. A gift is certain and irreversible: the donee's title is complete, and the donor cannot change his mind. A will is flexible and uncertain: the testator keeps everything and may change it at will, but the beneficiary must prove the will after his death, against whatever challenge the disappointed heirs raise, and registration will not spare him that.
7. The Errors That Recur
- Supposing a registered will is safer than an unregistered gift. The opposite is true: a completed gift has already transferred the property, while a registered will still has to be proved.
- Supposing that registration proves a will. It proves only that the document existed on that date, and wills are excluded from the proviso to Section 67 BSA that relieves a party of calling an attesting witness.
- Supposing a gift can be revoked at the donor's pleasure. It cannot. Section 126 permits revocation only on an agreed event not depending on the donor's will, or on a ground on which a contract could be rescinded, and a clause reserving a general power of revocation is void to that extent.
- Supposing a will can be made irrevocable. It cannot. Section 62 confers the power of revocation and it cannot be contracted away.
- Supposing attestation is a formality in either case. It goes to validity in both.
- Supposing a gift deed that reserves a life interest is a will. It is not, and the distinction has been settled.
8. The Position Stated Shortly
1. A gift is an inter vivos transfer made voluntarily and without consideration, and accepted during the donor's lifetime, Section 122 of the Transfer of Property Act.
2. A gift of immovable property must be by a registered instrument signed by the donor and attested by two witnesses, Section 123, and registration is compulsory whatever the value, Section 17(1)(a).
3. A will is a testamentary declaration taking effect on death, and is revocable at any time until then, Section 62 of the Indian Succession Act, 1925.
4. Registration of a will is optional, Sections 17(2)(b) and 18(e), and it may be presented at any time under Section 27.
5. A will must be attested by two or more witnesses under Section 63, and attestation goes to validity in both documents.
6. No acceptance is required for a will; acceptance is essential for a gift.
7. A gift attracts stamp duty; a will attracts none.
8. A donor may reserve a life interest without making the gift testamentary, Renikuntla Rajamma v. K. Sarwanamma.
9. Where a gift and a will cover the same property, the completed gift prevails, and the bequest is adeemed because the property left the estate in the testator's lifetime.
10. Section 48 of the Registration Act confers no priority on a registered will.
11. The choice between the two is a choice between certainty and flexibility.