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.