Both are legal ways to transfer property—but the intent, process, and tax impact are very different.
What Is a Gift Deed?
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A voluntary transfer of property without any payment
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Commonly used between family members (parents, children, siblings, spouse)
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Must be registered to be legally valid
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Once registered, it’s irrevocable
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Stamp duty is lower in most states for gifts to relatives
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No capital gains tax for the donor, but the donee pays tax if they sell later
What Is a Sale Deed?
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A commercial transaction where property is sold for money
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Legally transfers ownership to the buyer
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Must be registered and attracts higher stamp duty
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Seller may have to pay capital gains tax on profit
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Buyer must deduct 1% TDS if property value exceeds ₹50 lakh
When to Use Which:
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Use a Gift Deed when transferring property to close relatives without payment
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Use a Sale Deed when selling property to anyone—family or otherwise—for money
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Always consult a property lawyer to avoid future disputes
