Notable changes made to the Transfer of Property law

Recently, the government promulgated the Transfer of Property (Amendment) Act, 2026, creating a new category of gift which allows the donor to retain the right to enjoy the property’s benefits during their lifetime. The amendment inserted two new provisions after section 122 relating to gift, i.e. sections 122A and 122B.

Section 122A validates the transfer of any movable or immovable property by way of gift while retaining lifetime enjoyment of usufructuary rights. However, sub-section 2 of section 122A adds a condition that such gift shall only be valid when the transfer is made by any parent or grandparent to his or her child or grandchild or vice versa, or between spouses. Furthermore, the section maintains that the property shall pass to the donee’s heirs after her/his death according to the inheritance law, while the lifetime usufructuary enjoyment of the donor will subsist. The section also enunciates that this gift is a distinct mode of transfer, which shall not otherwise affect the validity of any gift, including Hiba under Muslim law.

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On the other hand, section 122B prevents revocation or variation of this form of gift once it is registered under section 17(1)(a) of the Registration Act, 1908. However, where variation or revocation becomes necessary to meet any financial, medical, educational, familial or other genuine necessity, the gift may be varied or revoked by the mutual consent of the donor and the donee. In case obtaining such consent is not possible due to minority, disappearance, unsoundness of mind, legal incapacity or any other sufficient cause, the District Judge may authorise such variation or revocation after giving notice to the interested parties, making necessary inquiry and being satisfied that the application is made in good faith.6