A Gift Deed is a legal document that describes voluntary transfer of gift from donor who is the owner of property to donee who is the receiver of gift without any exchange of money. The donor must be solvent and should not use this tool for tax evasion and illegal gains. It must be well defined existing movable or immovable property. It must be transferable. It should exist today and should not be a future property. It should be tangible.
1) It is executed during the life time of donor and transfer happens immediately whereas Will is applicable after death.
2) Gift deed needs to be registered; only then it is effective. Registration renders it less liable to litigation. Will on the other hand is prone to litigation.
3) Transfer using gift deeds are tax free in the hands of donor and donee.