Release deed or gift deed within the family in Maharashtra: stamp duty and tax compared

Rules and rates as of 20 October 2026.

When a flat is passed between family members in Maharashtra, two documents come up again and again: a gift deed and a release deed (sometimes called a relinquishment deed). They can look similar, since nobody is paid, but the Maharashtra Stamp Act charges them under different articles, and the Income-tax Act, 2025 treats them differently too. This explainer sets out what each document does, what we could and could not confirm about the stamp duty, and where the tax trap sits. It is general information; a lawyer should draft the deed and a chartered accountant should check the tax.

What each document does

• Gift deed. The owner transfers the property, or a share of it, to someone else without payment. The receiver need not have had any right in the property before.
• Release deed. A person who already holds a share gives up that share in favour of another person who also holds a right in the same property. The usual case is a flat inherited by two or more heirs, where one heir gives up a share so the other owns it outright.

The label on the deed does not settle the question. In Shailesh Harilal Poonatar v. District Collector of Stamps (Bombay High Court, 26 August 2004), a co-owner who had received the property under a will gave up his interest to the other co-owner without payment. The Collector treated it as a sale-type conveyance. The court disagreed, held that "even if there is a defined share or interest in the property it can still be released", and said: "What is decisive is the actual character of the transaction." It directed that duty be charged under the release article.

Stamp duty in Maharashtra: two different articles

Stamp duty rates sit in Schedule I of the Maharashtra Stamp Act, 1958. Gifts fall under Article 34. Releases fall under Article 52: section 30 of the Act lists "No. 52 (Release)", and the Bombay High Court applied Article 52 in the 2004 case above. (Article 48 is a different entry, so if a document or a website quotes "Article 48" for a release, ask the drafter to check.)

Gifts (Article 34). The Maharashtra Stamp (Amendment) Act, 2015 added a proviso: if residential or agricultural property is gifted to a husband, wife, son, daughter, grandson, granddaughter or the wife of a deceased son, the duty is ₹200. The Statement of Objects of the 2015 Bill called this relief for citizens transferring homes to close family. Note who is missing from that list: a brother, a sister, a parent and a son-in-law. Gifts to them pay duty on market value. A 2017 amendment set "3 per cent. on the market value" in a proviso to Article 34. We could not read the full article as it stands today, so confirm with the sub-registrar which relatives that rate covers before you rely on it.

Releases (Article 52). Clause (a) of Article 52 covers releases among certain relations, and the 2015 amendment added the words "without consideration in any form" to it. Clause (b) covers other cases. In a 2024 Bombay High Court matter, the argument over which clause applied turned on whether the property was ancestral or self-acquired. Law-firm and CA summaries describe clause (a) as a fixed ₹200 duty and clause (b) as duty at the conveyance rate on the market value of the share released. We could not open an official copy of Schedule I to confirm either figure, so treat them as indicative.

Income tax: why the gift deed has clearer cover

Under the Income-tax Act, 2025, both routes have to be checked from two sides, the person giving and the person receiving.

• The giver. Section 70(1)(b) says a transfer of a capital asset by an individual or HUF "under a will or a gift or an irrevocable trust" is not a transfer for capital gains. A release is not named there. Section 2(109)(a) defines "transfer" to include "the sale, exchange or relinquishment of the asset". And section 78 deems the stamp duty value to be the full value of consideration where the consideration for land or a building is less than that value. Whether these together create a capital gain for someone who releases a share for nothing is not answered in the text; ask a CA.
• The receiver. Section 92(2)(m) treats immovable property received without consideration as income where its stamp duty value exceeds ₹50,000. Section 92(3) switches this off for property received "from any relative", "under a will or by way of inheritance", and in a few other cases. "Relative" in section 92(5)(g) includes a spouse, brothers and sisters, lineal ascendants and descendants, and the spouse's equivalents. So a release between siblings or between a parent and child should not be income for the receiver under either label.
• Cost when the receiver sells. Section 73(1), Table Sl. No. 1, gives the previous owner's cost to an asset acquired "under a gift or will" or "by succession, inheritance or devolution". A release is not named in that table. How the cost of a released share is fixed is a question for your CA before you sign, not after you sell.

Worked example: one inherited flat, two ways

A Mumbai flat with a ready reckoner (market) value of ₹1,20,00,000 is held in equal halves by a brother and sister as their late mother's heirs. The mother bought it for ₹40,00,000. The sister wants her brother to own it outright. The brother later sells it for ₹1,50,00,000. Assume the gain is long-term and ignore improvement costs.

Stamp duty on the sister's half (market value ₹60,00,000).

• Gift deed: a brother is not in the ₹200 list. If the 3% rate applies: 60,00,000 × 3% = ₹1,80,000.
• Release deed under clause (a), if it applies: ₹200 (reported, not confirmed).
• Release deed under clause (b), at an assumed 5%: 60,00,000 × 5% = ₹3,00,000. Each 1% of duty on this share is ₹60,000.

Tax when the brother sells. His own inherited half carries his mother's cost: ₹40,00,000 ÷ 2 = ₹20,00,000. If the released half also carries her cost, total cost is ₹40,00,000 and the gain is 1,50,00,000 − 40,00,000 = ₹1,10,00,000; tax at 12.5% under section 197 is ₹13,75,000. If the released half were given no cost, the gain would be 1,50,00,000 − 20,00,000 = ₹1,30,00,000 and tax ₹16,25,000. The ₹2,50,000 gap (plus cess) is what the cost question is worth here. For a flat bought before 23 July 2024, section 197(3) can reduce the tax for resident individuals, so your CA may arrive at a lower figure.

Route for the sister's half	Stamp duty	Confidence	Brother's cost for that half on sale
Gift deed	₹1,80,000 at 3%	Rate in the 2017 amendment; coverage to confirm	₹20,00,000 (s.73, gift)
Release, clause (a)	₹200	Reported, not confirmed	Not named in s.73; ask a CA
Release, clause (b)	₹3,00,000 at an assumed 5%	Rate assumed	Not named in s.73; ask a CA

Had the mother been alive and gifting the whole flat to her son, the gift deed would have attracted ₹200 under the 2015 proviso, and he would take her cost under section 73.

Before anyone signs

• Get the ready reckoner value for the flat; duty on market value is worked out on it.
• Check who holds what today: a release only works for someone who already holds a share.
• Ask the sub-registrar which article and clause your deed will be stamped under, and in writing if possible.
• Keep the original purchase deed, the death certificate and any succession papers; they set the cost later.