Is Gifting Legal?

Gifting means something given voluntarily without payment in return. If you are giving gifts to your friends, family members, co-workers, to honor a person or an occasion then it’s legal. Many people give cash instead of products and it is referred to as cash gifting. Cash gifting is also legal as long as it’s not an illegal pyramid scheme. A pyramid scheme can cost you money and potentially land you in jail.

What Is A Gift?

By law, the gift is considered as an exchange or transfer of ownership of any property from one person to another. In this type of situation, the sender willingly transfers his/her property to the receiver without any compensation or any monetary value. In any circumstance, gifts are considered as a reward. Gift can be given by the sender to a receiver during any events like Wedding Ceremony, Birthday Party, etc. A gift can be moveable property or immovable property. So according to the T.P. Act, 1882,

“When the sender will have the intention to deliver any gift to the receiver of that gift and when the receiver will accept that gift without any consideration from the sender by law then this gift should be recognized as a legal gift by law.”

A gift would become revoked and void by law when the essential elements of a gift are not implemented properly.

The Analysis Of Definition Of A Gift By Law

In the eye of the law, a gift means transferring the ownership of something. The legal aspects of a gift will be revoked without a proper giving and taking process between donors and done. According to Section 122 of Transfer of Property Act, 1882:

“A Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor or guarantor or sender, to another, called the donor, and accepted by or on behalf of the donee or guarantee or receiver.”

So it is quite clear that a gift will void if the rules and regulations of giving and taking a gift are not observed properly. For example, if the gift receiver dies before accepting the gift despite the fact that the sender or donor has done proper intention to give that gift to the recipient then the gift may be void by law because of lack of acceptance of the done.

Though, the definition of gift in Muslim Law in India is different from the Transfer of Property Act, 1882. According to Muslim Law in India –

“A gift is a transfer of property or right by one person to another in accordance with the provisions given in the Mohammedan law and includes- a) A Hiba, an immediate and unconditional transfer of the ownership of some property or of some right, without any consideration or with some return (ewaz); and b) An Ariat, the grant of some limited interest in respect of the use or usufruct of some property or right.”

In Muslim law in India, The terms “Hiba” and “Gift” are often indiscriminately used but the term “Hiba” is only a kind of transaction that is covered by the general term “gift” which is a transfer without consideration.

“A gift given by any Muslim in favor of his co-religionist must be under the Mohammedan Law. A gift is not a contract or an agreement (though in original Muslim law it is called a contract) but the principle may be applicable even to gift.”

Reasons For Revoking Or Suspending Or Voiding A Gift By Law

According to Section 126 of the Transfer of Property Act, 1882, any gift may become revoked or suspended, or void for the following reasons:

1. If donee wants to get a gift like a Laptop from a donor on a specific event like Birthday but the donor has not had the intention to give any Laptop on the birthday of the done but has been forced to give that gift then that gift shall become legally revoked or suspended or void.

2. If the donee does not want to get any gift from the donor but has been forced to get that gift by the donor then that that gift shall become legally revoked or suspended or void

3. If the subject matter of the gift is illegal and full of debts then that gift shall become legally revoked or suspended or void.

4. If both donor and donee have the intention to suspend any gift then that gift shall become legally revoked or suspended or void.

5. If any gift is presented to the donee with misrepresentation and fraud information made by the donor then that gift shall be legally revoked or void or suspended.

6. If any gift contains compensation or consideration made by donor or donee then that gift shall be legally revoked or void or suspended.

7. If the donor of any gift dies before delivery then that gift shall be legally revoked or void or suspended.

8. If the donor or the donee of any gift is a minor or disqualified person then that gift shall be legally revoked or void or suspended.

9. Thus, any gift may become legally void or suspended, or revoked.

Reasons For Non-Revoking Of A Gift

According to the Muslim Law in India, any gift can’t be revoked for the following reasons:

1. If any gift is prepared by any Husband for his Wife or any Wife for her Husband then that gift cannot be legally revoked.

2. If any gift is intended for a religious purpose, then that gift can’t be revoked.

3. If the subject matter of the gift is damaged or destroyed then that gift can’t be revoked.

4. If the donee dies before acceptance then that gift can’t be revoked.

5. If any immovable property has been willed by a donor for donee then that gift can’t be revoked.

6. If the donee of the gift receives monetary value or another object in exchange for the original gift then that gift can’t be revoked.