Difference Between Will and Gift Deed in India: A Complete Legal Guide for 2025

Will and gift deed are two distinct legal tools used for property transfer in India. While a will outlines asset distribution after a person’s death, a gift deed enables immediate, irrevocable transfer during one’s lifetime. Each serves a different purpose and comes with separate legal, tax, and registration requirements. Choosing the right one depends on your timing, intent, and control preferences.

In India, property ownership is not just about possession, it’s about planning. As individuals seek smarter ways to manage succession and protect assets, understanding the difference between a will and a gift deed has become crucial. Whether you’re planning for your children, securing your spouse’s future, or managing joint family assets, the choice between these two instruments can have long-term legal and financial implications.

In 2025, as digital registrations and estate awareness grow, property owners are increasingly turning to estate planning not just as a necessity, but as a responsibility. This article breaks down the key distinctions between wills and gift deeds in India, including their legal validity, tax impact, stamp duty liabilities, and strategic uses.

The Core Difference: Timing and Control

A will is a legal declaration by a person specifying how their property should be distributed after death. A gift deed, in contrast, is a voluntary and immediate transfer of ownership from one living person to another. This timing distinction fundamentally separates the two.

• A will takes effect only after the death of the person who made it. Until then, the individual retains full control and can modify or revoke it at any time.
• A gift deed is effective immediately upon execution and registration. Once the asset is transferred, the donor loses ownership and control.

This is why wills are often seen as tools for flexible, future-oriented estate planning, whereas gift deeds are used for clear, present-day transfers—especially within families.

Legal Standing and Registration

Legally, both instruments are valid. However, their requirements differ.

1. Will:

• Can be handwritten or typed on plain paper
• No stamp duty required
• Registration is optional but highly recommended
• Requires attestation by two independent witnesses

2. Gift Deed:

• Must be drafted on stamp paper
• Mandatory registration under Section 123 of the Transfer of Property Act, 1882
• Requires both parties (donor and donee) to sign in the presence of witnesses
• Once registered, it becomes a legally binding, irrevocable transfer

Registration of will vs gift deed often becomes the deciding factor. While registration of a will adds credibility, it’s not compulsory. Gift deeds, however, are not valid without proper registration and stamping.

Stamp Duty and Financial Implications

Will:

• No stamp duty
• No registration charges (or nominal fees, depending on the state)

Gift Deed:

• Stamp duty is compulsory
• Rates vary across states and depend on the relationship between donor and donee

Here are the updated stamp duty rates for gift deeds in 2025 (indicative):

The stamp duty on gift deed in India is a critical cost component that must be budgeted, especially for non-family transfers.

Taxation on Gift Deed vs Will

Property transfer through will:

• No inheritance tax in India
• The legal heir is not taxed at the time of inheritance
• If the property is sold later, capital gains tax applies, calculated from the date the previous owner acquired the property

Gift Deed:

• Gifts from relatives are exempt from tax
• Gifts from non-relatives exceeding ₹50,000 are taxed as income in the hands of the recipient
• Capital gains tax applies when the recipient sells the property, with cost basis taken from the original owner’s acquisition value

Thus, when evaluating taxation on gift deed vs will, the will often emerges as more tax-efficient—especially in high-value asset transfers or where long-term holding is anticipated.

Revocability and Legal Safety

A will is a revocable document. It can be modified any number of times using codicils or entirely rewritten. This is particularly useful in cases where family dynamics or asset composition changes over time.

On the other hand, a gift deed is irrevocable. Once signed, stamped, and registered, the transfer cannot be undone except in rare legal situations involving coercion, fraud, or mutual cancellation agreements backed by the court.

From a legal safety standpoint:

• Wills can be contested in court—especially if there’s suspicion around the testator’s mental capacity or undue influence.
• Gift deeds are harder to dispute once registered, offering a more final and enforceable solution.

Strategic Use: Which Is Better for You?

Choose a Will if you:

• Want to retain control over your property during your lifetime
• Expect changes in family structure, beneficiaries, or asset values
• Prefer flexibility and long-term succession planning
• Wish to avoid immediate transfer costs or stamp duty

Choose a Gift Deed if you:

• Want to transfer property immediately and clearly
• Are gifting to a spouse, child, or sibling to reduce inheritance friction
• Are making a donation to a trust or charitable institution
• Want to avoid probate and delay after your passing

The decision isn’t about which is superior. It’s about what works best for your intent, financial planning, and family situation. Many high-net-worth individuals even choose a hybrid approach—using gift deeds for a portion of the estate during their lifetime and wills for the remaining distribution after death.

FAQs: Legal Procedure and Practical Concerns

Is stamp duty required for a will in India?
No. Wills do not attract stamp duty. They can be written on plain paper.

Can a gift deed be revoked?
Generally, no. Gift deeds are irrevocable unless proven to have been executed under fraud or coercion.

Which is safer: will or gift deed?
Both are safe if legally executed. Gift deeds offer finality; wills offer flexibility.

Can a gift deed be made without the donee’s consent?
No. The donee must accept the gift for the deed to be valid.

Is probate required for a gift deed?
No. Only wills require probate in certain cases. Gift deeds, once registered, are legally binding.

Choosing between a will and a gift deed in India is more than just a legal formality—it’s a strategic estate decision. Each tool has its strengths and limitations. A will offers control and flexibility, making it suitable for long-term estate plans. A gift deed provides legal certainty and immediate ownership transfer, ideal for those looking to streamline property succession during their lifetime.

In 2025, as awareness of estate planning continues to rise, individuals must make informed decisions backed by legal clarity and professional advice. Whether you’re drafting your first will or planning an asset gift, ensure your documents are well-drafted, properly witnessed, and, where necessary, registered.

A clear plan today can prevent conflict tomorrow.

Also Read: How to Make a Legally Valid Will in India (2025 Guide)