Q. What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement?
Ans. 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, whichever is higher.
Q.What is Stamp Duty and who is liable to pay the Stamp Duty, the buyer or the seller?
Ans. Stamp Duty is a tax, similar to sales tax and income 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. Section 30 of Bombay Stamp Act, 1958 states the liability for payment of stamp duty.
Q.Are there any formalities to be completed or forms to be filled on execution of the Sales Deed or document of transfer?
Ans. Yes. The formalities and forms may vary from State to State depending on where the property is situated. 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.
Q.What documents are required while buying commercial or residential property?
Ans. 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. Avail the services of Buniyad.com. 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 (PAN) 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.
Q.What are the permission and papers that one should check with the builder when buying a flat in a building which is under construction?
Ans. When you are buying a flat from a builder in a building under construction, you have to check the following things: Approved plan of the building along with the number of floors. Whether the floor that you are buying is approved. Whether the land on which the builder is building is his or he has undertaken an agreement with a landlord. If so, check the title of the land ownership with the help of an advocate. The building byelaws as applicable in that area and ensure that the builder is building without any violation of front setback, side setbacks, height, etc. Check if the specifications given in the agreement to sell of the sale brochure match on the ground or not? Whether urban land ceiling NOC (if applicable) has been obtained or not. NOC from water, electricity and lift authorities has been obtained.
Q. What constitutes completion of the sale?
Ans. 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.
Q. Who is the appropriate authority for knowing the market value of the property?
Ans. 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.
Q.Within what time period should an agreement/deed have to be registered?
Ans. The property agreement should be registered with the Sub-registrar of assurances under the provisions of the Indian Registration Act within four months of the date of its execution.
Q.What is meant by leasehold and freehold properties?
Ans. Leasehold properties (plot/built-up) are those in which perpetual leasehold has been granted by the title paramount in favour of the lessee. In such properties, the title paramount, i.e. President of India acts through DDA, L&DO, Leasehold properties are not freely transferable. Depending upon the covenants of the lease deed, prior permission of the lessor (DDA/ L & DO) is required to transfer the property. Freehold properties are those where title paramount has conveyed the property in favour of the purchaser by conveyance/sale deed with no restriction on the right of the holder of the property to further transfer the property. Record of ownership of the freehold property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.
Q.What formalities need to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?
Ans. They are required to file a declaration in for IPI and with the central office of Reserve Bank at Mumbai within 90 days from the date of purchase of immovable property or final payment of purchase consideration, along with a certified copy of the document evidencing the transaction and the bank certificate regarding the consideration paid.