Settlement of property among brothers.

Querist : Anonymous (Querist) 10 July 2023 This query is : Resolved
My father Mr X Made a Settlement Deed of his Own Property in October 2016 among his three sons. Party 1) SK, Party 2) RK and Party 3) RC. Father passed away in 2017.
The property was valued at 75 Lakhs at that time and to be shared equally by three.

Now Party 3 (RC) wants to release his share to Party 1 (SK) & Party 2 (RK) by accepting an equal settlement from them.
The property is now valued at 90 lakhs . So Party 1 SK & Party 2 RK will pay 15 lakhs each ( totalling 30 lakhs ) to Party 3 RC.
So that the property henceforth can be shared between Party 1 (SK) & Party 2 (RK) only.

Please advice what sought of deed has to be executed. Settlement Deed OR Release Deed.

Whis is the Right deed to be executed so that the Releasor doesn't attract capital gain tax and releasees shouldn't have any documentation issue later.

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kavksatyanarayana (Expert) 11 July 2023
You three brothers mutually agree for the amount to you and you shall release your rights over the property to your brothers. It is not a settlement deed and only a release deed. For capital gain consult a local CA.

P. Venu (Expert) 16 July 2023
The settlement deed having been executed, in my view, transaction could only be in the nature of sale of property.

Of course, the brother can gift the property to other brothers at his discretion, but without any consideration.

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