Gift Deed vs Will in India: Which one is better and why?

Gift deeds provide immediate property transfers but incur high stamp duty and forfeit control forever, while wills offer revocable planning with zero stamp duty on drafting or post-death execution—making them far cheaper and more practical for most families. Platforms like iWills.in simplify will creation, helping NRIs and residents under Hindu Succession Act rules secure legacies without upfront tax erosion.

What is a Gift Deed?

A gift deed effects an immediate, irrevocable transfer of property during your lifetime under the Transfer of Property Act, 1882. Registration confers full ownership to the donee instantly—no probate follows death.

Key features:

Tax-free for blood relatives, but capital gains tax applies if resold.
Ideal for avoiding future disputes in stable family setups.
Downside: No take-backs, even if family dynamics shift.

What is a Will?

A will outlines asset distribution post-death only, fully revocable under the Indian Succession Act, 1925, or personal laws. You retain complete control, income, and usage until passing.

Key features:

Update anytime for new assets like digital holdings.
Heirs secure via probate (select cities) or succession certificate, followed by mutation.
No new deed required for ownership change.

Head-to-Head Comparison

Aspect	Gift Deed	Will (Full Process)
Timing	Lifetime immediate	Post-death only
Revocability	None	Anytime via codicil/new will
Control	Lost post-registration	Retained till death
Stamp Duty	5-7% market value upfront	Zero on document & transfer
Total Cost	₹50k-₹2L+ (duty dominant)	₹999 drafting + probate if any
Probate	Not needed	Not needed post 2026
Flexibility	Rigid lifetime gifts	Full estate, conditions

Myth Buster: Stamp Duty on Will Execution

Many assume wills trigger gift-deed-level stamp duty (5-7%) after death when changing ownership. This is false—wills attract zero stamp duty under the Indian Stamp Act, 1899. Post-death mutation updates revenue records based on probate/succession certificate, exempting stamp duty entirely. Families save lakhs compared to gift deeds' immediate erosion of estate value—no new conveyance deed or duty payment required, just nominal mutation fees (₹100-₹500).

This myth persists due to confusion with intestate processes, but a clear will streamlines transfers tax-free.

Why Gift Deeds Cost More & Risk More

Upfront stamp duty (e.g., ₹5 lakhs on ₹1 crore property) plus 1% registration drains liquidity now. Irrevocability invites disputes if the donee sells or family needs change—common regrets in India's evolving households.

Why Wills Excel for 90% of Cases

Draft for ₹999 at iWills.in on plain paper—no stamp needed. Handle digital assets, guardians, life interests. Probate (2-4% if applicable) totals less than one gift duty. Reduces disputes by 30-40% via explicit intent.

When to Choose What

Gift Deed: Urgent gifts to trusted kin.
Will: Comprehensive planning—default recommendation.

Avoid intestacy: Unequal shares under personal laws.

Summary:

Gift deeds offer immediate, irrevocable property transfer with no probate needed later—ideal for tax-free gifting to blood relatives and avoiding future disputes—but they demand high upfront stamp duty (5-7% of market value), forfeit all control forever, and risk family rifts if circumstances change. Wills provide full revocability, lifetime control, and zero stamp duty on drafting or post-death mutation (just probate if required), making them cheaper long-term (drafting ₹999+) and flexible for comprehensive estates including digital assets—though they activate only after death and may involve court validation in select cities. For most Indian families, wills deliver superior value without eroding estate wealth upfront. In summary, the act of inheriting property itself is generally exempt from stamp duty in India, but the associated legal processes and potential future transactions require careful consideration of local laws and fees.