Tax Exemption
In the case of self-occupied property acquired or constructed out of borrowed funds, the deduction available for interest on capital borrowed is Rs. 2,00,000/-. In case of a rented property, the whole of the interest amount is allowed as deduction. The interest on borrowed funds in pre-construction period is allowed over a 5 year period commencing from the previous year in which the house is acquired or constructed.
Applicable as per the current Rules and Regulation of the Act.
Depending on the criteria of the customer, the maximum benefit can be availed up to Rs.2.67 lakhs.
Home Loan
- Various varieties of housing loans are offered by different financial institutions. Prominent among these are:
- Home Loans
- This is the basic housing loan for the purchase of a new home, which covers the cost of the flat, deposits and charges, stamp duty and registration charges.
- Home Improvement / Extension Loans
- These are for the purpose of undertaking repair works and renovations in a home that is already owned by you.
- Bridge Loans
- Bridge loans are for people who wish to sell their existing house and purchase another one and need finance for the new house until a buyer is found for the old one.
- Balance Transfer
- A balance transfer indicates the paying off of an existing housing loan and availing of a loan with a lower rate of interest.
- Refinance Loans
- Refinance loans are taken to pay off the debt incurred from private sources such as relatives and friends, for the purchase of your present house.
- Loans To NRIs
- These loans are designed as per the requirements of NRIs who want to buy a house in India.
- Any Indian citizen, including Non-Resident Indi ans, with a steady source of income, can borrow funds for financing the cost of a flat from housing finance companies and banks.
- Yes, depending upon the eligibility criteria and policy of the bank.
- Loans are generally disbursed between 70%-80% of the cost of the flat. The balance money is to be funded by the flat purchaser from his own contribution. The percentage of loan would vary from bank to bank.
- All projects at Bhansali are preapproved for the grant of home loans by leading housing finance companies and banks. The Bhansali sales team liaises with the all leading Housing Finance Institutions for project approvals, processing the loan, documentation and disbursement of loans.
- Equated Monthly Installment (“EMI”) is the amount comprising a portion of the interest and the principal loan amount, which is payable by a borrower to the lender every month.
- Interest rates vary from time to time and from institution to institution. The interest is calculated either on a daily or monthly reducing or yearly reducing balances.
- A fixed-rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.
- A floating interest rate loan is a loan where the interest rate payable is linked to the bank’s internal prime lending rate (PLR) such as the base rate which rises and falls as per banks policy.
- Repayment period options range generally from 5 to 20 years. Some of the banks may give loans up to 25 years also.
- Processing Fees are payable to the lender on applying for a loan and can either be a fixed amount not linked to the loan or may also be a percentage of the loan amount.
- Prepayment Penalty between 1% and 2% of the amount being prepaid is charged by some institutions when a loan is paid back before the end of the agreed duration. Many banks now don’t levy penalty on partial prepayment.
- Franking Charges as per the prevailing rate of Government Authority.
- The flat purchased is the primary security and is mortgaged to the lending institution till the entire loan is repaid. Additional security such as life insurance policies, shares, bonds, fixed deposit receipts, national savings certificates can also be offered, as per the requirements of the institution.
- Yes. Many lending companies require 1 guarantor or a co-applicant.
- Varies from bank to bank but usually, it is 15 – 20 days for a salaried person and 20 – 30 days for a self-employed person depending on the applicant’s documents.
- Usually, loans are disbursed within 10 – 15 days after completion of verification by the institution, documentation (original agreement for sale/lodging receipt) and completion of all relevant procedures. Submission of proof that the borrower’s own contribution has been paid by him to the vendor/builder/developer is also an important aspect.
- Yes, but this policy varies from bank to bank. The standard list of documents required of all loan applicants is as follows:
- The standard list of documents required of all loan applicants is as follows:
- Photographs Proof of age
- Identity papers
- Proof of residence
- For salaried individuals:
- Latest salary slip
- Last 2 years form 16 or equivalent
- Bank statements reflecting salary credits for the previous six months
- For self-employed individuals:
- Certified copies of balance sheet
- Profit and loss statement
- Tax challans/tax returns for the previous 3 years
- For partnership/private limited companies:
- The Articles of Association
- Partnership deed and details about the firm
- For NRIs
- Latest salary certificate specifying, name (as it appears in the passport)
- Date of joining
- Passport number
- Designation
- Perquisites and salary
- Photocopy of labour card/identity card
- Photocopy of valid resident visa stamped on the passport
- Photocopy of monthly statement of local bank account
- Property related documents
General FAQ’s
When buying commercial or residential property you would need to check for the following documents
- Market Trends about prevalent rates of property in the vicinity and last known transactions.
- Identify the property you wish to purchase
- Formulate commercial terms.
- Distinguish between terms and conditions of the contract which are negotiable and those which are fixed e.g. price, payment schedule, time of completion etc.
- List your requirements with a reputed broker.
- Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any, on the property must be cleared before completion of purchase of the property. The title of the Vendor to the property must be clear and marketable.
- Finalise commercial terms of purchase of the property. Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.
- Ascertain outgoings to be paid for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.
- Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.
- Will you require a loan for making payment of the consideration amount? Ask for a pre-approval letter from the lending institution.
- Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration
- After payment of the entire sale price, take over legal possession of the property along with documents of title in original from the Vendor of the property
Change name of the holder of the property to the purchaser in the records of the society, electricity company, municipal corporation, Index II etc.
The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary. Section 30 of Bombay Stamp Act, 1958 states the liability for payment of stamp duty
Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.
The lawyer can be allowed to take inspection of all original documents pertaining to the property.
Regarding authenticity of documents, again, you have to take the help of an advocate to verify.
- Every State has its set forms under the Registration Rules that are required to be filled and filed along with and at the time of Registration of Sale Deed/Transfer Deed.
- Under the provisions of the Income Tax Act and Rules for a transaction of sale, it is now compulsory for the Purchaser and Seller to give their Permanent Account Number and in the event of either the Seller and/ or the Purchaser would be required to fill Form 60 of the Income-Tax Rules.
In case of either the Purchaser or the Seller being a Non-Resident Indian, not assessed to tax in India, such a Party would be required to file Form 60 of the Income-Tax Rules.
- Every time the immovable property is sold/purchased, the agreement needs to be registered.
- Instrument of gift of immovable property;
- Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
- Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest;
- Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does not exceed Rs. 50/- .
- Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
- Authorities to adopt a son that is not conferred by a will.
The instruments like Agreement to Sell, Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney, settlement and Deed and Transfer of lease attract Stamp Duty on market value of the property.
- Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
- Built-up Area is the carpet area plus the thickness of outer walls and the balcony.
- Super Built Up Area is the built-up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.
This break up is extremely essential as builders can place anywhere from 65% to 85% per cent of the super built area as carpet area. That means, if the price is quoted as 1,000 sq ft super built up area, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the vendor/ builder mention it in the sale deed.
A freehold property (plot or a flat) is one where there is a whole and sole owner(s), ownership is full and unconditional (within the provisions of the laws of the land) and there is no lessor / lessee involved.
Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed and mutually agreed by the Lessor and lessee. The land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property.
General FAQ’s after purchase of residential/commercial property
An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. Usually, the entire amount is paid at the time of handing over possession.
Sale Deed also known as conveyance deed, is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.
The valuation process evaluates the market value of the property. Demand and supply forces operating in the market, as well as other factors like type of property, quality of construction, its location, the local infrastructure available, maintenance, are all taken into consideration before the market value is decided.
The Sub-Registrar of the area, in whose jurisdiction the property is located, is the appropriate authority for knowing the market value of the property
The registration fee in case of sale of immovable property is 1% of the market value or Rs 30,000, whichever is lower. There could be some additional charges for scanning of documents were the office of the Sub Registrar has been computerized.
A ready reckoner is published on the 1st day of January every year.
- Duly completed, stamped and signed instrument printed on a single side only.
- Receipts for payment of Stamp Duty and Registration Fees.
- Property Register Card
- Commencement Certificate issued by the Municipal Corporation for premises in a building under construction and Occupation Certificate for a completed building.
- Property Tax Bill in case of depreciation in market value for old buildings
It is advisable to go personally but in case it is not possible, a power of attorney can be issued to some other person. This Power of Attorney should mention all the relevant clauses and preferably be registered before the Sub Registrar.
Yes, the POA holder of the developer is present at the member escorts our customers for registration.
Every document which is required to be registered under the Registration Act, except a Will, should be presented at the office of the Sub Registrar of Assurances for the registration within the prescribed time of four months from the date of its execution. A document is registered with a sub-registrar appointed by the State Government, under the Indian Registration Act, 1908.
Yes. A Deed of Confirmation with the original document attached is signed and registered.
An instrument, which is not registered, is inadmissible as evidence.
Yes. Stamp duty has to be paid on the gift but the rate of duty is lower. In Maharashtra, the sale of a flat attract levy of duty of 5% and a gift attracts levy of 2%.
Delay in payment of stamp duty attracts penalty at the rate of 2% per month on the amount of the stamp duty that has to be paid, up to a maximum of twice the amount of the stamp duty payable. An instrument, which is not properly stamped, is inadmissible as evidence.
In case you wish to ascertain the correct stamp duty payable on an instrument, an application can be made for to the Collector of Stamps.
The transfer of a flat is concluded when you have an sale deed/ agreement for sale coupled with actual possession. Generally, in all cases the entire amount is paid simultaneously with the handing over of physical possession and signing of the transfer documents.
The stamps are required to be purchased in the name of any one of the executors to the Instrument.
Market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the market value which ever is higher.
