Elder sister can GIFT away her share, title and rights in respect of the property absolutely in favour of her younger sister, this GIFT DEED must be registered in the office of the sub-registrar, within whose jurisdiction the property is located.
Alternatively the elder sister can also Relinquish or Release her 50% share in the property in favour of the younger sister as well. Both these forms of conveyance within family members do not attract stamp duty at Market rate. There is a fixed stamp duty payable which is very negligible.
The option suggested or proposed by you, i.e., Letter stating "I claim no rights to the property" duly signed and attested by a notary will not be sufficient and legally binding on the transfer.