Release deed
Kumar
(Querist) 10 June 2012
This query is : Resolved
Dear Sir,
I bought a site in 1985. It was financed by my brother who was in a foreign country at that time. I don’t have any evidence to show that he financed it. I relinquished the property to my brother in 1995 by a release deed. Now it is being suggested that the release deed is not valid as the brother had no proven interest in the property. I would like to correct the mistake. Can I make gift deed? Is the cancellation of the release deed necessary to accommodate the gift deed? Is there any other solution?
Guest
(Expert) 10 June 2012
i st cancel the release deed and then execute the gift deed in favour of your brother. that's enough
ajay sethi
(Expert) 10 June 2012
agree with mr ganeshan . cancel the release deed first .
Guest
(Expert) 10 June 2012
But I dont find any legally valid reason why the Release Deed is not acceptable in your case. The Release Deed is nothing but you have released your right to the property in favour of your brother. That's it. So its conveyed the property to your brother absolutely. Gift is only another form of relinquishing the property by you to your brother. In fact, you said the property was purchased out of your brother's funds. If you write a gift deed, you should show your source of income for having purchased it.
Either its a Release Deed or a Gift Deed, it does not change the beneficial effect of the transaction.
Anirudh
(Expert) 10 June 2012
Dear Mr. Gurunarayana Rao,
You wonder why the release deed was not acceptable in the case.
It is simply for the reason that any interest in the property can be relinquished/released only to others who are having interest in the property. In the instant case, except the querist nobody else was having any interest in the property. Therefore, the question of release of interest by the querist in favour of anybody else does not arise.
You say that Gift is only another form of relinquishing the property. Yes you are correct. Please understand the subtle difference between the two terms. If the interest is given up in favour of anybody who is already having some interest in the property it is release deed. It will involve only nominal stamp duty.
On the contrary, if interst is given up by a person in favour of somebody, who does not have already any interest in the said property, it is called GIFT. This will involve payment of stamp duty on the value of the property so gifted.
