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.

"If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.

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.

The following documents are required to be registered compulsorily under the Indian Registration Act, 1908:

(a) Agreement for sale/purchase of an immovable property, needs to be registered.

(b)Instrument of trasnfer like lease, gift, mortgage, sale, assignment, etc of immovable property;

(c)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.

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.

Leasehold Property is a property which is 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 Lessee gets right to use and enjoy the property for that particular period.

An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. 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, title and interest in the property to the purchaser, who, in turn, acquires an absolute ownership of the property.

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

Stamp Duty is kind of a tax, collected by the government, and must be paid in full and on time. A stamp duty paid instrument/document is considered a proper and legal instrument/document. The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.

Market value of the property as ascertained by the stamp duty authorities on the basis of a ''Ready Reckoner'' which gives the per sq. mtr. value of each village, zone and sub-zone . The ready reckoner is normally published on 1st April of every year. The Stamp Duty is payable on the agreement value or Ready Reckoner valsue of the property, which ever is higher.

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 April every year.

• •   Duly completed, stamped and signed instrument printed on single side only.
• Receipts for payment of Stamp Duty and Registration Fees.
• •   Property Register Card / 7x12 extract.
• •   RERA registration number / certificate in case of sale of new property by builder.
• •   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.
• •   Occupation certifictae in case of sale of a unit in old building.

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, 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 document can be registered after lapse of four months with payment of penelty of wintin next four months from the date of lapse of earlier four months.

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 trasnfer of flat via Gift Deed attracts stamp duty of 3%.

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 four times 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 same needs to be purchased in the name of buyer of the property.

Yes, the Power of Attorney Draft can be signed and attested by the Indian Consulate/ Indian Embassy/or local notary. Once the Power of Attorney is received in India, the same has to be submitted to the Collector of Stamps for adjudication. After the same is adjudicated the POA holder can submit the same at the time of registration of the document.

1. Special Power of Attorney 2. General Power of Attorney. Both can be revocable or irrevocable and should confer the authority as desired by the person issuing the POA.

As per Section 55 of the Maharashtra Rent Control Act, 1999 registration of Leave and License Agreement is compulsory and it is the responsibility of the landlord to ensure registration. If the same is not registered, the landlord would be prosecuted and on conviction he's subject to up to three months imprisonment or be subject to fine not exceeding Rs.5000/- or with both. Further in the absence of a Registered Agreement, the contention of the tenant, about the terms and conditions on which the premises have been given to him by the landlord shall prevail unless otherwise proved.

Formerly leave and license agreements used to be signed in multiples of 11 months or 12 months. After The Maharashtra Rent Control Act, 1999 came into force from 1.3.2000 there is no stipulation as to whether leave and license agreement should be in multiples of 11 or 12 months, and there is no stipulation as to total time period. However, Leave and license agreement generally does not exceed three years.

Lease is defined under Section 105 of The Transfer of Property Act,1882 and a lease of immoveable property is a transfer of a right to enjoy such property for a certain time or in perpetuity on consideration to be rendered periodically or on specified occasions, while a license is defined in Section 52 of the Indian Easement Act,1882 and it does not create any interest in the premises in favour of the licensee excepting a mere right to use and occupy the premises for a limited duration. Both documents have to be registered.

While the possession cannot be handed over until completion of the formalities, temporary arrangement could be made to have the apartment kept open for a few hours for the purposes of performing the pooja, subject to approval from the Management of Gera Developments.

The Maintenance amounts are due from the date of Occupancy certificate

Property taxes area due from the date the unit is occupied or the date of completion certificate whichever is earlier.

Maintenance charges are subject to terms of agreement.

The contribution to Sinking Fund is a statutory obligation. Sinking Fund has to be contributed as decided by the General Body of the Society. It should be at least @1/4 per cent per annum on the cost of the each flat excluding the cost of the Land. On the resolution passed at the meeting of the General Body of the Society and with the prior permission of the Registering Authority, the Sinking Fund may be used by the Society for reconstruction of its building/s or for carrying out such structural additions or alterations to the building/s as in the opinion of the Society's Architect is required for carrying out such heavy repairs as may be certified by the Architect. However permission is not usually granted by the Registrar to withdraw amounts from the sinking fund.

Non occupancy charges are levied by the society when the flat owner rents it out to a third party.

According to Section 194IA of I. Tax Act ,1961, the buyer of an immobile property must deduct TDS at 1% while making the payment to the owner or seller of the property.

Some conditions that apply to the above provision is as under:

• TDS is applicable only for consideration value of Rs.50 lakhs and above.
• TDS deduction made by the buyer must be deposited within 30 days from the end of the month in which the deduction was made.
• Along with the TDS, the buyer needs to submit Form 26QB on TRACES Portal (tdscpc.gov.in) with details of PAN of the seller and the buyer. In case the PAN of the seller is not present, the TDS rises to 20%.
• The buyer must retain the proof of TDS deposition, which is a challan generated when the TDS is submitted.
• On submission of 26QB & on payment of TDS, Form 16B gets generated on TRACES portal copy of which needs to be given to seller.

Under Section 201, the following simple interest will be levied in case of non-deduction of TDS:

•   1% interest/month from the date of scheduled deduction

In case of delay in payment of TDS after deduction

•   1.5% interest/month for late payment of TDS to the government from the date of scheduled deduction

Under both the scenario as mentioned above, the below Fee will accrue under section 234E:

•   ₹200 per day during which default continues for late filing of TDS statement. The total late charge should be lesser or equal to the actual TDS liability.

Scenario 1: Customer is already owning a housing property which was purchased more than 2 years ago & is selling the same.

Scenario 2: The customer is owning long term asset other than house property & selling it.

Under scenario 1, the customer can take benefit of section 54 & under scenario 2, customer can take benefit of section 54F.

The Gist of section 54 is as follows:

An individual or HUF selling a residential property can avail tax exemptions from long term Capital Gains if the capital gains are invested in purchase or construction of residential property.

The seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer. In case the seller is constructing a house, the seller has an extended time, i.e., the seller will have to construct the residential house within 3 years from the date of sale/transfer.

The Gist of Section 54F is as follows:

If capital gain arises from transfer of any Long term capital asset not being a residential house & the assesses has within a period of one year before or two years after the date on which transfer took place “purchased or has within a period of three years after the date ,constructed one residential house in India ,the capital gain will be exempt to the extent of cost of new residential house property or capital gain whichever is lower .

For detailed commentary & condition, kindly refer section 54 & 54F of I. Tax Act ,1961.

Please refer section 54 & 54 F of the income tax ACT 1961 for further clarification.

provision of Section 50C of Income tax Act ,1961 is:

The value adopted by the stamp valuation authority should not exceed 110% of the consideration value (CV) received or accrued as a result of sale. If the difference between the same is more than 10% then entire difference will be liable to income tax. For e. g. If the consideration value is 50 lakhs & the stamp valuation is 58 lakhs, the difference between the two is of Rs 8 lakh being more than 10% of the consideration value. The entire difference of Rs. 8 lakhs will be taxable in the hands of buyer of the property in the year when the agreement is registered.

GST of 1 % is leviable if the valuation of the residential unit adopted for the purpose of discharge of stamp duty does not exceed 45 lakhs and the RERA carpet area does not exceed 90 sq. mtr. In all other cases, GST leviable @ 5 % for residential units.

Interest paid prior to the previous year in which possession is taken can be claimed in 5 equal instalments starting from the year in which possession is taken. However, interest for the period in which possession is taken can be claimed in the same Previous year. The total amount of deduction under section 24 will not exceed the maximum limit of deduction.

If white Goods are sold by the developer to all the customer & the agreement includes cost of white good, the rate of GST will be same rate as levied on sale of flat. However, if the option is given to customer to buy white goods & agreement value is different for all those who do not exercise this option, the rate will be the same rate at which white goods are sold.

In case of joint ownership of property by husband & wife, interest benefit can be availed by both of them in the proportion of loan amount availed by them subject to ceiling of 2 lakhs in both the cases if the property is self-occupied. If they are giving the same property on rent, they will get proportionate deduction of interest amount payable without any ceiling.

Any adjustment in tax invoice can be done before expiry of 6 months from the end of the financial year by issuing credit note.

If the total RERA carpet area of commercial units is not exceeding 15% of total Project Rera carpet area (Residential & Commercial), the GST rate will be 5 % of the agreement value. If the area exceeds 15%, the rate will be 12% (1/3 after deduction for land).

Note: For detail comments & conditions, kindly refer the relevant sections of I. Tax Act 1961 quoted above in various questions.

Non-Resident Indian (NRI) is a citizen of India, who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. Non-resident foreign citizens of Indian Origin are treated at par with Non-Resident Indian (NRIs).

Person of Indian Origin (PIO) (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who

•  At any time, held an Indian passport, or

•  Whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

1. Any person of full age and capacity:

• Who is a citizen of another country, but was a citizen of India at the time of, or at any time after, the commencement of the constitution, or
• Who is a citizen of another country, but was eligible to become a citizen of India at the time of the commencement of the constitution, or
• Who is a citizen of another country but belongs to a territory that became part of India after the 15th of August 1947.
• Who is a child of such a citizen, or

2. A person, who is minor child of a person mentioned in clause (1) Provided that no person, who is or had been a citizen of Pakistan, Bangladesh shall be eligible for registration as an Overseas Citizen of India.

Documents required for buying property

• PAN card (Permanent account number)
• OCI / PIO card (In case of OCI / PIO)
• Passport (In case of NRI)
• Passport size photographs
• Address proof

Under the general permission granted by RBI, the following categories can freely purchase immovable property in India:

1. Non-Resident Indian (NRI)- who is a citizen of India residing outside India

2. Person of Indian Origin (PIO)- who is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who

• At any time, held Indian passport or
• Whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

The general permission, however, covers only purchase of residential and commercial property and not for the purchase of agricultural land/plantation property/farmhouse in India. OCIs can purchase immovable property in India except agricultural land/plantation property/farmhouse.

Since general permission is not available to NRI / PIO to acquire agricultural land/plantation property/farmhouse in India, such proposals will require specific approval from the Reserve Bank and the proposals are considered in consultation with the Government of India.

The mere acquisition of property does not attract income tax. However, any income accruing from the ownership of it, in the form of rent (if it is let out)/annual value of the house (if is not let out and it is not the only residential property owned by that person in India) and/or capital gains (short term or long term) arising on the sale of this house or part thereof is taxable in the hands of the owner.

The Government of India has granted general permission to NRI / PIO / OCI to buy property in India and they do not have to pay any taxes even while acquiring the property in India. However, taxes have to be paid if they are selling this property. Rental income earned is taxable in India, and they will have to obtain a PAN and file a return of the income if they have rented this property. On sale of the property, the profit on sale shall be subject to capital gains. If they have held the property for less than or equal to 2 years after taking actual possession then the gains would be short term capital gains, which are to be included in their total income and will be taxed in the normal bracket. However, if the property has been held for more than 2 years, then the resulting gain would be labelled as long-term capital gains subject to tax as per prevailing rate .

India has DTAAs with several countries which give a favourable tax treatment in respect of certain heads of income. However, in case of sale of immovable property, the DTAA with most countries provide that the capital gains will be taxed in the country where the immovable property is located. Hence, the non-resident will be subject to tax in India on the capital gains which arise on the sale of immovable property in India. Letting of immovable property in India would be taxed in India under most tax treaties in view of the fact that the property is in India.

Type of asset: Assets like house property, land and building, jewellery, development rights, etc.

Rate of tax deduction at source (TDS)

Long term as per prevailing rate

Short term as per prevailing rate

Exemption available (only for long term capital gains)

The long-term capital gains arising on sale of a residential house can be invested in buying/constructing another residential house, within the prescribed time. The exemption is restricted to the amount of capital gains, or the amount invested in new residential house, whichever is lower. If the amount of capital gains is invested in bonds of National Highways Authority of India (NHAI) or Rural Electrification Corporation, then the entire capital gains is exempted, or the proportionate gain is exempted.

In case the non-resident pays any tax on capital gains arising in India, he would normally be able to obtain a tax credit with respect to the taxes paid in India/ home country, because the income in India would also be included in the country of tax residence. The amount of tax credit is also on the basis of computing the tax credit that can be claimed as specified in the respective country’s DTAA and is also dependent on the laws of the home country where the taxpayer is a tax resident.

1. If the property was acquired out of foreign exchange sources i.e., remitted through /normal banking channels/by debit to NRE / FCNR(B) account, the amount to be repatriated should not exceed the amount paid for the property:

• In foreign exchange received through normal banking channel or
• By debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR(B) account.

Repatriation of sale proceeds of residential property purchased by NRI’s/PIO’s out of foreign exchange is restricted to not more than two such properties. Capital gains, if any, may be credited to the NRO account from where the NRI’s / PIO’s may repatriate an account up to USD One million, per financial year, as discussed below.

2. If the property was acquired out of Rupee sources, NRI / PIO may remit an amount of up to USD One million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance. The NRI / PIO may use this facility to remit capital gains, where the acquisition of the subject property was made by funds sourced by remittance through normal banking channels/by debit to NRE / FCNR(B) account.

The rental income, being a current account transaction, is repatriable, subject to the appropriate deduction of tax and the certification thereof by a Chartered Accountant in practice. Repatriation of sale proceeds is subject to certain conditions. The amount of repatriation cannot exceed the amount paid for acquisition of the immovable property in foreign exchange.

An authorized dealer or a housing finance institution in India approved by the National Housing Bank may provide housing loan to a non-resident Indian or a person of Indian Origin residing outside India for acquisition of a residential accommodation in India, subject to the following conditions, namely:

1. The quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person residing in India.

2. The loan amount shall not be credited to Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident non-Repatriable (NRNR) account of the borrower.

3. The loan shall be fully secured by an equitable mortgage by deposit of title deal on the property proposed to be acquired, and if necessary, also be lien on the borrower’s other assets in India.

4. The instalment of loan, interest and other charges, if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-Resident External (NRE)/Foreign Currency Non-Resident (FCNR)/Non-Resident Non-Repatriable (NRNR)/Non-Resident Ordinary (NRO)/non-Resident Special Rupee (NRSR) account in India, or out of rental income derived from renting out the property acquired by utilization of the loan or by any relative of the borrower in India by crediting the borrower’s loan account through the bank account of such relative (The word ‘relative’ means ‘relative’ as defined in section 6 of the Companies Act, 1956.)

5. The rate of interest on the loan shall conform to the directives issued by the Reserve Bank of India or, by as the case may be, the National Housing Bank.

If you are an NRI / OCI / PIO, you will have to file your income tax returns if you fulfil either of these conditions:

•  Your taxable income in India during the year was above the basic exemption limit OR

•  You have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit.

Note: The enhanced exemption limit for senior citizens and women is applicable only to Residents and not to Non-Residents.

Yes, there are two exceptions:

•  If your taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you do not have to file your tax return.

•  If you earned long term capital gains from the sale of equity shares or equity mutual funds, you do not have to pay any tax and therefore you do not have to include that in your tax return.

Tip: You may also file a tax return if you have to claim a refund. This may happen where the tax deducted at source is more than the actual tax liability. Suppose your taxable income for the year was below basic exemption limit but the bank deducted tax at source on your interest amount, you can claim a refund by filing your tax return.

Another instance is when you have a capital loss that can be set-off against capital gains. Tax may have been deducted at source on the capital gains, but you can set-off (or carry forward) capital loss against the gain and lower your actual tax liability. In such cases, you would need to file a tax return.

Traditionally, you could file your tax return either by giving a power of attorney to someone in India or by sending your form and documents to a tax expert in India who would then file the return on your behalf.

But nowadays, the easiest option for NRIs to file their Indian tax returns is by using the online platform. There are several options to file online.