Suraj

Legal Info

Signing a title report (received from the solicitor of the property) with any fine print and specific government reservations is unadvisable. Accept clearance reports that are lucid and specific. For instance, if you are interested in buying property that has been built over reclaimed land, make sure that building has been given clearance by the government. Precautionary measures will prevent you from getting embroiled in any future disputes. They will also help ensure that your home loans aren't scrutinized.

Permissions & Approvals

Before a construction begins; the builder must seek several permissions and approvals from relevant bodies. Without these clearances, the construction may come under litigation. Here is a list of documents and approvals that the builder must possess for all building work to commence in the Pune Metropolitan Region

ULC order (in specific cases)

IOD and CC of the project

PMRDA approved plans

Home Loan

To be eligible for a home loan, the applicant must be at least 21 years of age with a regular source of income from employment or self-employment. The loan must terminate before or when the applicant turn 65 years of age. The applicant should also posses at least 6 months of income proof.

Making Payments

Non-resident Indians holding Indian passport do not require any permission from RBI for acquiring immovable property for bonafide residential purposes.
Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of NRO/ NRE/ FCNR account.

Home Loan for NRI'

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act, 1973. Every bank and housing finance companies follow the RBI guidelines to define NRI - "An Indian citizen who holds a valid documents like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI."

Stamp Duty and Registration

Stamp Duty

Stamp duty is payable under Section 3 of The Maharashtra Stamp Act, 1958
Stamp duty is payable on market value or agreement value whichever is higher
Market value of any property is determined by the stamp duty authorities on the basis of the Stamp Duty Ready Reckoner issued by the government on January 1 every year.
A stamp duty paid document is considered a proper and legal document and as such gets evidentiary value and admitted as evidence in the court of law. The documents that are insufficiently stamped are not admitted as evidence by court

Registration Fees

Once the stamp duty is paid on the document, it has to be registered with the Sub Registrar of Assurances of the respective district. The document is to be registered according to the provisions of The Registration Act, 1908.
The document should be registered within 4 months from date of execution.
All parties executing the document admit before Sub Registrar of Assurances that they have executed the document presented for registration. Parties are then identified by two independent witnesses.
Parties to the document are photographed and their left hand thumb impression is taken and such photograph and thumb impression is affixed on additional pages attached to the document apart from colour photographs and thumb impression which a person affixes in agreement value while executing a document.
The Sub Registrar of Assurances records the content of the document, including the additional pages, either by photocopying or scanning the content of the documents.
If a particular document is required to be compulsorily registered under the law and is not registered then the proper legal title will not pass on the purchaser i.e. the title will be defective and document becomes inadmissible in the court of law.

Tax Benefits

When buying a property with loans from specific financial institutions, tax authorities provide certain benefits and exemptions from tax payments.

Section 24 of the Income Tax Act states that an investor is allowed to deduct an amount equivalent to the total interest payable on the housing loan from his/her taxable income within the same financial year. If an investor were to take a loan, he/she would receive a deduction of up to 1.5 lakhs on the interest rate paid. The only concern is that the property would have to be bought or constructed within 3 years from the end of the financial year in which the loan was taken and would have to be self-occupied.

According to Section 80c of the Income Tax Act: A deduction u/s 80C (2) (xviii) is available on repayment of the principal during a financial year of up to Rs. 1,00,000/-, this aforesaid limit is within the overall limit of Rs 1 lakh, specified in section 80C of the Income Tax Act. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assesse is also considered under this amount. This deduction is taken from the Gross Total Income.

The simplified guide to property ownership