I am the primary owner and my sister is the co-owner of a flat. However, I want her to be the sole owner. Do I need to opt for a gift or a release deed?
If you and your sister are co-owners of the flat, and there is no encumbrance on the flat that precludes you from transferring your interest in the flat to your sister, then you may opt for either a gift deed or release deed to transfer your interest in the flat to her. In this case, since the release of your interest in the flat will be without consideration, it would be in the nature of a gift and accordingly, the provisions of the Transfer of Property Act, 1882 (TOPA) would apply both to the deed of gift as also the deed of release.
As per the provisions of TOPA, a gift of immovable property has to be made through a deed in writing by the donor to the donee and accepted by or on behalf of the donee, during the life time of the donor. The donor should be competent to contract, and the principles laid down in the Indian Contract Act, 1872, relating to free consent, would apply to the donor at the time of making the gift. But the donee need not be competent to contract and in such a situation a gift may be accepted by, or on behalf of such a person who is not competent to contract, for example, a minor.
Further, as per the provisions of TOPA, the written instrument or the deed in writing effecting the transfer must be signed by (or on behalf of) the donor, and attested by at least two witnesses and registered under the provisions of the Indian Registration Act, 1908. A deed of release is an instrument executed between co-owners whereby one of the co-owners releases or renounces his interest in the specified property in favour of another and the result of such release would be the enlargement of the share of the other co-owner(s). A release deed may either be with or without consideration. As you want to release your share without your sister paying you any consideration, the provisions of TOPA would apply to the deed of release.
The execution of the deed of release and that of gift will attract stamp duty in accordance with the laws of the state where the flat is situated. Stamp duty differs from state to state and the rate of stamp duty payable will depend on the nature of the document executed by you and your sister (viz; gift deed, release deed). You can decide on the form of the document (i.e., whether it should be by way of a deed of gift or a release deed) depending upon the stamp laws of the state where the flat is located.
Remember that the aforementioned document will have to be registered with the office of the sub-registrar of assurances within whose sub-district the flat is situated, within four months of the date of execution. Applicable registration charges will be leviable thereon. The type of document you choose to transfer your interest to your sister would depend on the facts and circumstances applicable to you. But both forms of documents would be possible from a legal perspective.