GENERAL

What approvals/documents must one review before choosing to buy a home in a building under construction?

Following is a list of documents that buyers are advised to review before purchasing a home in a building under construction.

  • Clear Title Certificate provided by Solicitor/Advocate of the Builder (Ensure that ownership of the land lies with the builder or that the builder has entered into a joint-venture agreement with the landowner.)
  • IOD (Intimation of Disapproval) and CC (Commencement Certificate) issued by MCGMList item two
  • Approved Plans issued by MCGM
  • MOEF (Ministry of Environment and Forest) Clearance. (Required for projects over 20,000 square meters of constructed area)
  • Any Other Specific NOC's such as CRZ (Costal Regulation Zone) or ULC (Urban Land Ceiling) that may affect the project.
LOANS

Who is eligible for a Home Loan?

To apply for a home loan you must be 21 years of age. Further, the loan must terminate before you turn 65 years old. You must be employed or self-employed with a regular source of income.

Who is eligible for a Loan for Office Premises?

To apply for a loan for office premises you must be 21 years of age. Further, the loan must terminate before you turn 65 years old. You must be self-employed with a regular source of income. The loan can be for the purchase/construction/extension of a non-residential property. A loan for renovation or improvement will be given only at the time of acquisition of property. Professionally qualified and self-employed individuals can apply. A minimum of 3 year's work experience is a must.

How much can I borrow?

Housing Finance Companies examine several factors such as income, age, number of dependents, educational qualifications, assets and liabilities, income stability/continuity of your employment or business, credit history and worthiness etc. before they can assess your repayment capacity. Loans are generally disbursed up to a maximum of 85% of the value of the home

How can I enhance by eligibility for a home loan?

If your spouse is earning, you can add him/her has a co-applicant. The additional income when added will improve your eligibility for a home loan. In fact, if there are any co-owners they must necessarily be co-applicants. Your fianc├ęs income could also be considered to improve your eligibility but proof of marriage will be required before any disbursement is made. Additional security such as bonds, fixed deposits and LIC policies may also help enhance your eligibility.erally disbursed up to a maximum of 85% of the value of the home.

What documents are required to be submitted while applying for a home loan?

Latest salary certificate / slip in original

Age proof: PAN card, voters ID, passport, license

Xerox of Form no.16 A (TDS Form) from employer. Certificate in original from employer for any other allowances, which are not reflected in salary slip

Updated bank pass book / Xerox of statement of accounts for last 6 months

Xerox of your company's ID or ration card

Passport size photographs of applicant and co-applicant

Processing fees cheque

Any Other documents as may be required by the Bank/Financial Institution

Self-Employed Individuals

Updated bank passbook or a Xerox of the statement of accounts for the last 6 months

Age proof: PAN card, Voters ID, Passport and License Xerox of ration card

Business profile with details on the nature of business, list of clients, suppliers, staff strength, geographical spread, etc.

Xerox of education qualifications certificate and proof of business existence

Xerox of last 3 years Income Tax returns Last 3 years profit /loss and balance sheet Processing fees cheque.

Stamp DUTY AND REGISTRATION

Is an agreement for sale of flat/shop/office necessary to be stamped?

As per the Bombay Stamp Act, 1958, the purchaser is required to have his agreement for sale stamped by law.

Which are the instruments that attract payment of Stamp Duty on?

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.

What are the present rates for Stamp Duty?

he present rate of stamp duty is 5% for all residential premises above Rs. 5,00,000\- is Rs. 7650\- plus 5%. The rate of stamp duty is 5% for shops/offices/galas/garages etc

On what value is stamp duty paid?

Stamp duty is paid on Market Value (as per latest Ready Reckoner) or Agreement Value; whichever is higher.

In whose name should the stamp paper be purchased? Can the client exercise the document on a stamp paper purchased by an Advocate?

As per Sec. 34 of the Bombay Stamp Act, the stamp papers should be in the name of one of the parties who have signed the documents. If the stamp paper has been purchased in the name of an Advocate, C.A., etc., then such instrument shall be treated as an instrument not duly stamped and shall be inadmissible in evidence.

Is there a time frame within which the stamp document must be executed?

A stamped document should be executed within six months from the date of stamping.

Is it possible to get a refund of stamp duty already paid on an instrument?

Yes, if stamp duty is paid on an instrument but the instrument is not signed by any party then an application is to be made to the concerned authorities for refund of stamp duty within six months from the date of stamping. On receipt of such application, the concerned authorities are empowered to refund the value of stamp duty after deducting such amounts as may prescribed.

What is the procedure to pay stamp duty?

Once the stamp duty is calculated, the flat purchaser must issue a pay order for the amount in favor of "SUPERINTENDENT OF STAMPS, Mumbai". The pay-order is given for franking of the agreement. Later, the said agreement is duly filled and signed by the respective parties.

In case of resale of the flat who has to pay the stamp duty, the purchaser or the seller?

The parties can themselves decide who shall pay the stamp duty. If nothing is mentioned in the agreement then as per Section 30 of the Bombay Stamp Act, if the transaction relates to resale of flats, the stamp duty will have to be paid by the purchaser.

Is it necessary to register the agreement after stamp duty has been paid?

The stamp duty paid document has to be registered under the Indian Registration Act with the sub-registrar of Assurances, of the jurisdiction where the property is situated. The basic purpose of registration is to record the ownership.

What is the procedure for Registration?

Once adequate stamp duty is affixed on an instrument and it is dated, signed by the parties and attested (where required) by witnesses, it can be lodged for registration after payment of the registration fee. All parties signing the instrument are required to attend the office of the concerned Sub Registrar of Assurances either in person or through their constituted attorney to admit execution of the instrument. If the signatory to the instrument is different than the person present for registration, the power of attorney in such case will require registration. A copy of the PAN Card is essential for registration. After lodging an instrument it is registered and the seal of the Sub Registrar is affixed on the instrument, thereafter the original instrument is returned back to the parties.

How much service tax is applicable while buying a property?

If less than 1cr then 3.5% on agreement value and more than 1cr is 4.2% on agreement value.

NRI's

Are NRI's and PIO's permitted to purchase or sell immovable property in India?

Yes, NRI's and PIO's are permitted to purchase or sell immovable property in India with the exception of agricultural land, farm house and plantation property. No special permission requires to be obtained for this purpose from the Reserve Bank of India.

Are NRI's and PIO's permitted to avail of loans for the purchase of residential/commercial premises from banks/financial institutions in India?

Yes, NRI's and PIO's are permitted to avail of loans to purchase residential/commercial premises in India. These loans are available for construction of new house / flats, purchase of old house / flat addition / alteration to an existing house and repairs / renovation etc. NRIs can avail of loans by mortgaging an existing residential property. However, for availing home loans, NRIs have to fulfill certain conditions according to provisions of the Income Tax Act. They should have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.

Can Indian companies grant loans to their NRI staff?

The Reserve Bank of India (RBI) permits Indian firms / companies to grant housing loans to their employees deputed abroad and holding Indian passports, subject to certain conditions.

What are the eligibility criteria for an NRI or PIO to avail a loan for residential/commercial premises?

An NRI or PIO loan applicant must be at least 21 years of age and have a minimum monthly income of $2,000/-. Further, the loan seeker must be at least a graduate. In addition banks and financial institutions consider the stability and continuity of your employment or business, number of dependents, assets and liabilities, etc.

How can an NRI make payments for the purchase of immovable property in India?

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE / FCNR / NRO accounts maintained with banks in India.

Can one open NRE, FCNR & NRO accounts in joint names?

You can only open a joint NRE and FCNR account if the other person is also an NRI. An NRO account can be held with an Indian Resident.

Can NRIs and PIOs give residential / commercial premises on rent if not required for immediate use?

Yes, RBI has granted general permissions for letting out any immovable property in India. The rental income or proceeds of any such income are eligible for repatriation subject to payment of taxes and production of a certificate issued by a chartered accountant with the guidance of an Authorised Dealer, such as, a bank for completion of formalities.

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