Both are legal ways to transfer property—but the intent, process, and tax impact are very different.
What Is a Gift Deed?

• A voluntary transfer of property without any payment

• Commonly used between family members (parents, children, siblings, spouse)

• Must be registered to be legally valid

• Once registered, it’s irrevocable

• Stamp duty is lower in most states for gifts to relatives

• No capital gains tax for the donor, but the donee pays tax if they sell later
  What Is a Sale Deed?

• A commercial transaction where property is sold for money

• Legally transfers ownership to the buyer

• Must be registered and attracts higher stamp duty

• Seller may have to pay capital gains tax on profit

• Buyer must deduct 1% TDS if property value exceeds ₹50 lakh
  When to Use Which:

• Use a Gift Deed when transferring property to close relatives without payment

• Use a Sale Deed when selling property to anyone—family or otherwise—for money

• Always consult a property lawyer to avoid future disputes