Donation - Legal Aspects

Legal Aspects

Donations are given without return consideration. This lack of return consideration means that, in common law, an agreement to make a donation is an "imperfect contract void for want of consideration." Only when the donation is actually made does it acquire legal status as a transfer or property. In civil law jurisdictions, on the contrary, donations are valid contracts, though they may require some extra formalities, such as being done in writing.

In politics, the law of some countries may prohibit or restrict the extent to which politicians may accept gifts or donations of large sums of money, especially from business or lobby groups (see campaign finance). Donations to charities are also usually tax deductible. Because this reduces the state's tax income, calls have been raised that the state (and the public in general) should pay more attention towards ensuring that charities actually use this 'tax money' in suitable ways.

In countries where there are limits imposed on the freedom of disposition of the testator, there are usually similar limits on donations.

The person or institution giving a gift is called the donor, and the person or institution getting the gift is called the donee.

In India, donations for charitable purposes are eligible for tax exemptions.