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swetha (finance advisor)     17 September 2014

Difference between gift deed and settlement deed

hai anyone tell about what is difference between gift deed and settlement deed


 4 Replies

K.K.Ganguly (Advocate)     17 September 2014

1. Gift Deed is executed when the owner of a property gifts the saod property or any part/portion thereof to another person having no ownership right on the said property or part/portion thereof,


2. In case of settlement deed, the joint owners of a property settles the ownershps of specific properties or part/portion thereof or settles any property ralated dispute as regards to mpartition of the propertry. 

T. Kalaiselvan, Advocate (Advocate)     25 September 2014

A settlement deed is a disposition in writing of movable or immovable property made in consideration of marriage, for the purpose of distributing properties of the Settler among his family, or those for whom he desires to provide for, or for the purpose of providing for some person dependent on him, or for any religious or charitable purposes. Settlement also includes an agreement in writing to make such a disposition, or where a disposition is not made in writing, any instrument recording, whether by way of a declaration of a trust or otherwise, the terms of any such disposition.

 The difference between Gift deed and settlement deed is:

There is a marked difference between a gift and a settlement. A gift is not made for any consideration, where as a settlement may be in consideration of marriage. Like-wise, a gift may be made to any person, where as a settlement is mostly made in the favor of dependents. Also, gift requires an acceptance, whereas a settlement does not. A gift is revocable or may be suspended as per Section 126 of the Transfer of Property Act on the happening of any specified event, which does not depend on the Will of the donor unlike that of a settlement, which is final and binding once it is executed by the Settler.

1 Like

jayakar babu katikala   02 December 2016

But, if you see the definition of the 'settlement', it creates confusion.  As in case of the settlement there must be a pre existing right over the property to the person in whose favour settlement is made.  But, the definition of settlement gives an impression that settlement can be made to any person to whom one who desires to settle the property.  This is indicative that settlement can be made to anybody though that individual did not have any right over the property before the settlement or he need not be a family member of the settler. Such is the case, as gift deeds attract more stamp duty, obviously, one will try to settle the property to any person including a family member to avoid higher rate of stamp duty.  Please suggest me how to catch hold and plug loop holes of such legal evasion?

Zeta Teresa Pereira   03 February 2020

Dear Ma'am, 

A gift deed means a legal document that describes voluntary transfer of gifts from a donor to a donee without any exchange of money. 

On the other hand, a settlement deed is a document that formalizes an agreement between relevant parties to settle a dispute.  

Hope this is clear.


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