In Tamil Nadu you can pass property to family in three common ways: a gift deed, a settlement deed or a will. A gift or settlement deed transfers ownership now and must be registered; a will transfers property only after your death and can be changed at any time. For transfers to close family, a settlement deed usually attracts a capped, concessional stamp duty, which is why it is the most popular route in Coimbatore families. The right choice depends on whether you want to give up ownership today, keep control, or protect your own future.
Key takeaways
- Gift and settlement deeds take effect immediately and generally cannot be revoked at will.
- A will takes effect only on death, can be changed any number of times, and registration is optional.
- Tamil Nadu charges a capped duty on settlements, partitions and releases among family members, but full rates for non-family transfers.
- Senior citizens who transfer property expecting care have a remedy under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.
- Mandatory probate for wills in Chennai, Mumbai and Kolkata was removed by the Repealing and Amending Act, 2025.
How the three documents compare
| Point | Gift deed | Settlement deed | Will |
|---|---|---|---|
| When ownership passes | On registration and acceptance | On registration (can reserve life interest) | On the testator’s death |
| Can the maker change it? | Only in narrow cases | Only in narrow cases | Yes, any time before death |
| Registration | Compulsory | Compulsory | Optional |
| Stamp duty in Tamil Nadu | 7% of market value, plus 2% registration fee | Family: 1% capped at ₹40,000, plus 1% registration fee capped at ₹10,000. Non-family: same as gift | None |
| Typical use | Transfer to non-family or where no concession applies | Parents to children, between spouses, within family | Planning for after death, keeping control while alive |
Rates are from the Tamil Nadu Government’s published stamp and registration fee schedule (family-rate caps revised with effect from 10 July 2023). Tamil Nadu amended its definition of “family” in 2024 to include the legal heir of a deceased family member. Confirm current rates and who counts as family with your Sub-Registrar before you draft.
Gift deed
Section 122 of the Transfer of Property Act, 1882 defines a gift as a voluntary transfer without consideration, accepted by the recipient during the donor’s lifetime. Section 123 requires a gift of immovable property to be made by a registered instrument signed by the donor and attested by at least two witnesses. Once accepted, it can be revoked only if the parties agreed on a specific condition that does not depend on the donor’s mere will, or on grounds such as fraud that would let a contract be set aside (Section 126).
Settlement deed
In Tamil Nadu, a “settlement” is the usual form for transferring property to family members out of love and affection. It can settle property on one person or several, and can reserve a life interest so parents continue living in the house or collecting rent during their lifetime. Because it is a non-testamentary transfer, it must be registered and operates immediately.
Can a settlement deed be cancelled?
A settlement that has been accepted and acted upon cannot be cancelled simply because the settlor changes their mind. The main exception is Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007: if a senior citizen transfers property on the condition that the recipient will provide basic amenities and care, and the recipient fails, the Maintenance Tribunal can declare the transfer void. The Supreme Court applied this in Urmila Dixit v Sunil Sharan Dixit (January 2025). The Madras High Court has taken differing views on whether the care condition must be written into the deed, with a Division Bench in March 2025 treating love and affection as an implied condition and a later single-judge ruling requiring an express clause. The practical lesson: if you expect care, write that condition clearly into the deed.
Will
A will under the Indian Succession Act, 1925 must be in writing, signed by the testator and attested by two witnesses (Section 63). It takes effect only on death and can be revoked or replaced any time. There is no stamp duty, and registration under Section 18 of the Registration Act is optional, though registration makes forgery claims harder.
Until recently, Section 213 required probate for wills of Hindus, Sikhs, Jains and Parsis in the old Presidency towns, including Chennai. The Repealing and Amending Act, 2025 (assent December 2025) omitted Section 213, so probate is no longer mandatory there. A will made in Coimbatore dealing only with property outside Chennai was never caught by that rule. Banks, housing societies and buyers may still ask for probate or other proof where a will is disputed.
Which one should you choose?
- You want a child to own the house now and get a loan on it: settlement deed.
- You want to keep full control while alive: will, or a settlement with a reserved life interest.
- You want to benefit a friend or distant relative: gift deed or will; the family concession will not apply.
- You own agricultural land or farm land near Coimbatore: check the patta, and remember that NRIs and OCIs cannot usually receive farm land by gift, though they can inherit it.
Tax points
Gifts of property from relatives as defined in income-tax law are not taxed in the recipient’s hands, while gifts from non-relatives above the prescribed limit are. This rule was in Section 56(2)(x) of the Income-tax Act, 1961; the Income-tax Act, 2025 replaced that Act from 1 April 2026 and renumbered its provisions, so ask your chartered accountant for the current section. When the recipient later sells, the previous owner’s cost and holding period are generally carried over, which matters for capital gains.
After registration
Apply for patta transfer and update property tax and electricity records in the new owner’s name. Keep the original deed safely and obtain an encumbrance certificate showing the transfer. Our land documents guide explains each record.
Frequently asked questions
Is a settlement deed the same as a gift deed?
Legally, a settlement in favour of family is a type of gratuitous transfer, similar to a gift. The difference in Tamil Nadu is mainly the stamp duty treatment: family settlements get a capped concessional rate.
Can I revoke my will after registering it?
Yes. A later will or a written revocation executed with the same formalities cancels the earlier will, whether or not the earlier one was registered.
Can parents take back a settlement deed if the children neglect them?
They can approach the Maintenance Tribunal under Section 23 of the Senior Citizens Act. Their case is strongest when the deed expressly records that the transfer is subject to the child providing care.
Do I pay stamp duty on property I receive under a will?
No stamp duty is payable on a will. You will pay fees for patta transfer and related records, and may need a legal heir certificate or probate in some situations.
This article is general information as of September 2026, not legal, tax or financial advice. Rules and rates change; confirm with a qualified advocate, chartered accountant or the relevant department before you act.
References
- Tamil Nadu stamp duty and registration fee structure (Guidance TN)
- Urmila Dixit v Sunil Sharan Dixit, 2025 INSC 20 (summary)
- Madras High Court on implied condition in settlement deeds (LiveLaw)
- Repealing and Amending Act, 2025 and probate (Khaitan and Co)
Planning to pass on property in Coimbatore?
If you are restructuring family property or preparing to sell after a transfer, our team can help you plan the next step.
