Can I Gift A Car To A Friend In India?

Rakibul Hasan

Chief Editor of - Autos Donation

Rakibul Hasan, the CEO and founder of Autosdonation, is an automotive specialist with over a decade of industry experience. With a distinct mastery in car...Read more

Giving gifts is a wonderful way to show someone you care about them, and what could be a better gift than a car? However, the process of gifting a car can be complicated, especially in India where there are certain legal requirements that must be followed. So, can you gift a car to a friend in India? The answer is yes, but there are several important things you need to know before you proceed. In this article, we will explore the legal requirements for gifting a car to a friend in India, as well as some tips to make the process smoother and hassle-free.

Can I Gift a Car to a Friend in India?

If you are planning to gift a car to your friend in India, the process can be quite complicated. There are several legal requirements that you should be aware of, and it is important to follow the correct procedure to ensure that the gift is legitimate. In this article, we will discuss the steps you need to take when gifting a car to a friend in India.

Step 1: Transfer of Ownership

Before you can gift a car to someone in India, you need to transfer the ownership of the vehicle. This involves filling out the necessary paperwork and paying the transfer fee. The transfer of ownership can be done at the local Regional Transport Office (RTO), where you will need to submit the following documents:

• Original registration certificate
• Insurance certificate
• Pollution Under Control (PUC) certificate
• Address proof of the buyer
• Identity proof of the buyer

Once the transfer of ownership is complete, you can proceed with the gift.

Step 2: Gift Deed

To gift a car to your friend in India, you need to prepare a gift deed. This legal document outlines the terms and conditions of the gift, including the transfer of ownership and any other relevant details. The gift deed should be signed by both the donor (the person gifting the car) and the donee (the person receiving the car).

It is important to note that the gift deed should be stamped and registered with the sub-registrar of assurances in your area. This registration is necessary to make the gift legally valid.

Step 3: No Objection Certificate (NOC)

In some states in India, you may need to obtain a No Objection Certificate (NOC) from the local RTO before gifting a car to a friend. The NOC certifies that there are no outstanding dues or loans on the vehicle and that it is free from any legal issues. This certificate is necessary to complete the transfer of ownership and make the gift legally valid.

Benefits of Gifting a Car

Gifting a car to a friend in India can have several benefits. Firstly, it is a great way to show your appreciation and strengthen your friendship. Additionally, it can be a more cost-effective way to transfer ownership of a vehicle, as opposed to selling it and then buying a new one. Finally, gifting a car can be a tax-efficient way to transfer wealth, as it is not subject to gift tax.

Gift a Car vs Selling a Car

When deciding whether to gift a car or sell it, there are several factors to consider. If you are looking to transfer ownership of the vehicle quickly and easily, gifting may be the better option. However, if you are looking to get the best value for your car, selling it may be the better choice.

When selling a car, you will need to go through the process of finding a buyer, negotiating a price, and completing the transfer of ownership. This can be time-consuming and may require additional paperwork and fees. However, selling your car can often result in a higher return on investment.

Overall, gifting a car can be a great way to show your appreciation for a friend in India. However, it is important to follow the correct legal procedures to ensure that the gift is legitimate and legally valid. By following the steps outlined in this article, you can gift a car with confidence and ease.

Frequently Asked Questions

Here are some common questions and answers regarding gifting a car to a friend in India:

1. Can I gift a car to a friend in India?

Yes, you can gift a car to a friend in India. However, there are certain procedures that need to be followed to transfer the ownership of the vehicle from you to your friend. Firstly, you would need to clear all outstanding dues on the car such as pending loans, taxes, and fees. Secondly, you would need to obtain a no-objection certificate (NOC) from the regional transport office (RTO) where the car is registered. Finally, you would need to fill out the necessary forms and pay the applicable fees to transfer the ownership of the car to your friend.

It is important to note that gifting a car to a friend is not the same as selling a car. In a sale, the buyer pays the seller for the car, whereas in a gift, the transfer of ownership is free of charge. Therefore, it is important to ensure that all the necessary paperwork is completed correctly to avoid any legal issues in the future.

2. Is it necessary to pay taxes on a gifted car in India?

Yes, it is necessary to pay taxes on a gifted car in India. The tax amount is calculated based on the current market value of the car and varies from state to state. In some states, the tax amount may be waived if the car is gifted between family members. However, in most cases, the tax must be paid by the person receiving the gift. The tax payment must be made at the nearest RTO along with the transfer of ownership paperwork.

It is important to note that failure to pay the necessary taxes can result in penalties and legal issues in the future. Therefore, it is advisable to consult with a legal expert or a chartered accountant to ensure that all tax obligations are met.

3. Can a gifted car be registered in a different state in India?

Yes, a gifted car can be registered in a different state in India. However, the process for transferring the ownership of the vehicle may differ depending on the state where the car is being registered. In general, the same procedures for transferring ownership would apply, including obtaining a no-objection certificate (NOC) from the RTO where the car is registered and paying the applicable taxes and fees.

It is important to note that some states may require additional documentation or procedures for transferring a car from another state. Therefore, it is advisable to check with the relevant RTO in the state where the car is being registered to ensure that all necessary procedures are followed.

4. Can a gifted car be insured in India?

Yes, a gifted car can be insured in India. The person who receives the gift would need to apply for car insurance and pay the applicable premiums. It is important to note that the insurance policy must be transferred to the new owner’s name to ensure that it is valid.

It is advisable to compare different insurance policies and providers to find the best coverage and rates. Some insurance companies may offer discounts or special rates for new car owners or for cars that are gifted between family members.

5. What are the documents required for gifting a car in India?

The documents required for gifting a car in India include:

• Original registration certificate (RC) of the car
• No-objection certificate (NOC) from the RTO where the car is registered
• Form 28 (application for no-objection certificate)
• Form 29 (application for transfer of ownership)
• Form 30 (report of transfer of ownership of a motor vehicle)
• Copy of the car insurance policy
• Copy of the address proof of the person receiving the gift
• Copy of the identity proof of the person receiving the gift

It is important to ensure that all the forms are filled out correctly and that all necessary documents are submitted to the RTO. Any errors or omissions can delay the transfer of ownership or result in legal issues in the future.

How To Gift A Vehicle To Someone Without Paying Taxes

In conclusion, gifting a car to a friend in India is not only possible but also a thoughtful and generous gesture. However, it is important to follow the legal procedures and documentation required for the transfer of ownership. This includes obtaining a no-objection certificate, transferring the registration certificate, and paying the necessary taxes and fees. By doing so, you can ensure a smooth and hassle-free transfer of the car’s ownership to your friend.

Moreover, gifting a car to a friend can strengthen your bond and deepen your friendship. It can also help your friend in their daily life, especially if they do not have access to their own vehicle. However, it is important to consider the financial implications of gifting a car, as it can be a significant expense. It is also important to ensure that your friend is capable of taking on the responsibilities that come with owning a car, such as maintenance, insurance, and fuel costs.

Overall, gifting a car to a friend in India can be a meaningful and impactful gesture. By following the necessary procedures and considering the implications, you can ensure a successful transfer of ownership and strengthen your friendship in the process.

Rakibul HasanChief Editor of - Autos Donation

Rakibul Hasan, the CEO and founder of Autosdonation, is an automotive specialist with over a decade of industry experience. With a distinct mastery in car donations, sponsorships, and gifting, Rakibul combines his passion for automobiles and generosity to revolutionize the car donation landscape. He established Autosdonation to facilitate the car donation and gifting process, making it more accessible and enjoyable for all involved.

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