Archive / Investment Adviser (Level 2) / Basics of Estate Planning

nism-series-xb-transfer-of-property-act-gift-registration-requirements[ INVESTMENT ADVISER (LEVEL 2) ]

Under Sections 122 and 123 of the Transfer of Property Act, 1882, what are the mandatory statutory elements to effectuate a valid 'Gift' of immovable property?

[ A ]Must be made voluntarily without financial consideration, effected by a REGISTERED WRITTEN INSTRUMENT signed by the donor and attested by at least TWO (2) witnesses, and MUST BE ACCEPTED by the donee during the lifetime of the donor.[ CORRECT ]

[ B ]Can be made through a verbal telephone call.

[ C ]Acceptance can be made 50 years after the donor passes away.

[ D ]Gifts of real estate require zero registration.

Takeaway

The correct answer is A: a valid gift of immovable property under Sections 122-123 of the Transfer of Property Act must be voluntary and without consideration, made via a registered written instrument signed by the donor and attested by at least two witnesses, and accepted by the donee during the donor's lifetime.

Derivation

Because a gift transfers ownership without any payment in return, the law imposes strict formalities to prevent fraud and later disputes over whether a genuine transfer was ever intended. Section 123 specifically requires registration (unlike movable property, which can be gifted by mere delivery) and attestation by two witnesses to create a reliable, evidentiary record of the transfer. Section 122 separately requires the donee's acceptance to occur while the donor is still alive -- if the donor dies before the donee accepts, the gift is void, and the property instead passes under intestate succession or the donor's Will, which is the specific trap this question tests.

Why the others fail

B — Can be made through a verbal telephone call.

Contradicts Section 123's express requirement of a registered, written and witnessed instrument; a mere phone call cannot validly gift immovable property.

C — Acceptance can be made 50 years after the donor passes away.

Reverses the acceptance timing rule; Section 122 requires acceptance during the donor's lifetime -- posthumous acceptance renders the gift void.

D — Gifts of real estate require zero registration.

Contradicts the express statutory requirement; Section 123 mandates registration for a valid gift of immovable property, it is not optional.