FAQ's

Property Finder

FAQ's

 

FAQs for Domestic Customers

 

Q.1 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 abcrealtors.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 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.2 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.3 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.4 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.5 Whatare 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.6 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.7 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.8 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.9 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.10 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.

 

FAQs for NRIs

 

Q.1 Who is a Non-Resident Indian (NRI)?

Ans: An Indian citizen who stays abroad for employment or business or a 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 citizen (NRIs).

 

Q.2 Who is a person of Indian Origin (PIO)?

Ans: A person of Indian Origin (PIO) is a citizen of any other country but whose ancestors were Indian nationals at least four generations away.

 

Q.3 What is an OCB?

Ans: Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of at least 60% by individuals of Indian nationality or origin resident outside India. In overseas trusts at least 60% of the beneficial interest is irrevocably held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs as long as the ownership/beneficial interest held in them by NRIs continues to be at least 60%

 

Q.4 Can NRIs and Overseas Corporate Bodies (OCBs) invest in India? 

Ans: Investments by NRIs and OCBs are allowed, both, through the RBI route and also through the Government route, i.e., through the Foreign Investment Promotion Board (FIPB). 
NRIs and OCBs are permitted to invest up to 100% equity in real estate development activity and civil aviation sectors. Investment, made by the NRIs and OCBs, are fully repatriable, except in the case of real estate, which has a 3 year lock-in period on original investment and, 16% cap on dividend repatriation. For those proposals that do not qualify under the automatic route, Government approval is granted through FIPB.

 

Q.5 How should purchase considerations for the residential immovable property be paid by foreign citizens of Indian origin under the general permission?

Ans: 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 accounts maintained with banks in India.

 

Q.6 Is there a limit to the number of investment in acquiring commercial properties in India?

Ans: Most of the apartments are developed by developers so it will be handy to check the background of the developer, the builder, the designer, and the architect. You should always check if there have been any problems with their other developments in past. The financial position of the developer should be strong so that he could complete the project on time if the project is under construction, find out that the developer has the essential resource and building consents before paying anything. As far as quantity of NRI investment is concerned in real estate investment in India there is no limit on the number of investments can be made in commercial properties in India.

 

Q.7 Can a person of Indian origin acquire any immovable property in India by way of inheritance?

Ans: A person of Indian origin, resident outside India, may acquire any immovable property in India by way of inheritance from a person, resident outside India, who had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition by him or the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. Immovable property, by way of inheritance, can also be acquired by a person of Indian origin resident outside from a person resident in India.

 

 

Q.8 Are NRIs permitted to send remittances outside India out of the assets in India that are inherited by them?

Ans: Yes. RBI will consider application from NRIs for remittance of assets, inherited by them in India. Such remittance may be permitted up to US$ 100,000 per year.

 

Q.9 What is the approved method of sending remittances into India? 

Ans: The approved method of sending remittances into India is through normal banking channels.

 

Q.10 At what rates are remittances in foreign currencies made by NRIs converted by banks into rupees?

Ans: Such remittances will be converted by banks at the market rate of exchange.

 

Q.11 What is Foreign Exchange Management Act (FEMA)?

Ans: Residential status and nature of transaction i.e. capital account transaction (e.g. purchase/ sale of shares, property) or current account transaction (e.g. remittance of income on shares, property) are the cornerstones of FEMA. Under FEMA, certain types of transactions do not require RBI permission while others either require prior approval of RBI/ Government or it is mandatory to inform RBI of the same.

 

Q.12 Can a person of Indian origin resident outside India gift properties acquired earlier in terms of the provisions of FERA/FEMA?

Ans: Yes. A person of Indian origin resident outside India may transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India. A Person of Indian origin resident outside India may also transfer by way of gift agriculture land/farm house/plantation property in India to a person resident in India who is a citizen of India.