About Release Deed
A release deed is a legal document that plays an important role in property transactions and settlements. It serves as a formal agreement between two parties, releasing one party's interest or rights in a property in favour of the other. Read on to understand more about release deed.
A release deed is a legal document used in the transfer of property rights. It is typically executed when one party (the releasor) decides to relinquish their rights in a piece of property to another party (the releasee). This deed is crucial in scenarios where multiple parties hold an interest in a property, and one wishes to give up their share or rights, effectively transferring them to another co-owner or a specified individual.
The release deed is commonly used in family and inheritance scenarios, where a member may choose to forgo their share in favor of another family member. This instrument is different from a sale deed as it usually involves a transfer without monetary consideration, particularly among family members.
Process of Release Deed
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Frequently Asked Questions
A Release Deed is a legal document used to relinquish or transfer rights, title, or interest in a property, asset, or claim. It's a formal agreement between two parties, where one party (the Releasor) gives up their rights or claims in favor of the other party (the Releasee).
The essential elements include:
- Parties: Clearly identify the Releasor (the person giving up rights) and the Releasee (the person gaining rights).
- Description of property/asset: Accurately describe the property, asset, or claim being released.
- Consideration: Specify any payment or benefit received by the Releasor (if applicable).
- Covenants: Include promises or agreements, such as indemnification or non-assertion of claims.
- Warranties: State any warranties or representations made by the Releasor.
- Representations: Include any statements or declarations made by the Releasor.
- Indemnification: Specify the Releasor's liability for any claims or damages.
- Governing law: State the laws governing the Release Deed.
- Signatures and witnesses: Include signatures of both parties and witnesses (if required).
- Date: Specify the date of execution.
- Recitals: Optional, but can provide background information or context.
A Release Deed is necessary for:
- Clearing titles: Releasing claims or interests in a property to ensure clear ownership.
- Resolving disputes: Settling disputes or controversies by releasing claims or rights.
- Transferring ownership: Transferring ownership or interest in a property or asset.
- Ending liabilities: Releasing liabilities or obligations, such as debts or contracts.
- Confirming rights: Confirming the rights of the Releasee, ensuring they have complete ownership or control.
- Preventing future claims: Preventing future claims or disputes by releasing all claims or interests.
- Compliance with laws: Complying with legal requirements, such as stamp duty and registration.
- Tax benefits: Potential tax benefits, such as avoiding capital gains tax.
- Estate planning: Facilitating estate planning by releasing assets or interests.
- Business transactions: Facilitating business transactions, such as mergers or acquisitions.
According to the Transfer of Property Act 1882, a Release Deed is valid only if registered. The registration of a Release Deed includes the Releasor's signature and the Releasee's attestation by two witnesses (mandatory).
In fact, the Release Deed will be enforceable only if it is registered with the registrar’s office. The registration of a Release Deed involves the enumeration of the essential clauses on a stamp paper and payment of the requisite stamp duty. The value of the stamp duty varies from state to state. It must be noted that if the gifted asset is movable, the jurisdiction of the registrar's office will be according to the place of residence of the Releasor.
Yes, registration of a Release Deed is mandatory in Maharashtra, as per the Indian Registration Act, 1908.
No, a minor can be a Releasee, but the Release Deed must be executed by a guardian or parent on their behalf.
Yes, stamp duty is payable on Release Deeds in Maharashtra, as per the Maharashtra Stamp Act, 1958. The stamp duty on Release Deeds in Maharashtra varies based on the relationship between the Releasor and the Releasee, as well as the type of property being released.
1) There are three charges in deed. (Defend on property location):
Stamp Duty: RELEASE, that is to say, any instrument (not being an instrument as is provided by section 24) whereby a person renounces a claim upon another person or against any specified property.
As per Article 52 of the Maharashtra Stamp Act,
| (a): if the release deed of an ancestral property or part thereof is executed by or in favor of brother or sister (children of renounce’s parents) or son or daughter or son of predeceased son or daughter of predeceased son or father or mother or spouse of the renounce or the legal heirs of the above Relations [without consideration in any form] | ₹200/- |
| (b): in any other case. | The same duty as is leviable on a conveyance under clause (a), (b) 5[or as the case may be (c)] of Article 25, on the market value of the share, interest, part or claim renounced. |
Registration Fees: Registration fees is also a variable of sale value up to a certain limit, then it is fixed for all values above that limit.
Note: Registration value is 1% of sale value or 30,000/- whichever is higher.
Document Handling Charges (DHC) Fees: Online through collected Sub Registrar office for document handling, for every page of the document, a fee of Rs. 20/- is applicable.
Investing in a property is a most sought-after investment option. However, there might come a situation when you would want to transfer the ownership rights to another person. To transfer the rights, there are three ways: selling the property for which you must make a sale deed, gifting the property which requires a Gift Deed, or releasing the property which requires a Release Deed. Let us understand the difference between a Release Deed and a Gift Deed.
| Particulars | Release Deed | Gift Deed |
|---|---|---|
| Time Period | Release Deed is made when the Releasor is alive and is functional for a lifetime. | Gift Deed is made when the Donor is alive and is functional for a lifetime. |
| Revoked | A Release Deed can be revoked only under special circumstances by court order. | A Gift Deed can be revoked only under special circumstances by court order. |
| Registration | It is mandatory to get Release Deeds registered under Section 123 of the Property Transfer Act and Section 17 of the Registration Act. | It is mandatory to get Gift Deeds registered under Section 123 of the Property Transfer Act and Section 17 of the Registration Act. |
| Charges | Stamp duty and registration charges should be paid on Release Deed as per state Govt. | Stamp duty and registration charges should be paid on Gift Deed as per state Govt. plus LBT & Metro Cess. |
| Act | Release Deed falls under the umbrella of the Income Tax Act. | Gift Deed falls under the umbrella of the Income Tax Act. |
| Transfer Rights | Immediately, while alive. | Immediately, while alive. |
Yes, a Release Deed can be cancelled if the Releasor and Releasee agree, or if the court declares it void due to fraud, coercion, or undue influence.
Generally, a Release Deed cannot be revoked, but in certain circumstances, like fraud or coercion, it can be challenged in court.
The tax implications vary depending on the property type, value, and location. Generally, the Releasee may be liable for income tax or capital gains tax.
Benefits include:
- Tax benefits
- Avoidance of disputes
- Legal transfer of ownership
- Clarity on ownership rights
Typically registered within 4-7 working days.
Shivay Services provides the best services to make a Release deed. All you have to do is provide your contact number and information, consult with our expert, provide relevant documents, and get it done.
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Fill simple form regarding your personal details on Shivay Services website to create a document draft. Upload Documents online on our website. or Send Email / What's app.
Stamp Duty and registration fees to be paid towards register office. Govt. Fee, Stamp Duty and Registration fees varies state to state. Shivay Services help you calculate stamp duty/fee as per current laws/rules.
Registration of document is must as per registration act. All parties has to visit concern registrar office or done online. After satisfactory scrutiny of documents and entities involved, document is registered with easily.