What is market value?
MARKET value in relation to any property which is the subject matter of an instrument
means the price which such property would have fetched if solid in the open MARKET
on the date of execution of such instrument or the consideration mentioned in the
instrument, whichever is higher. The price which such property would have fetched
if sold in the open market is determined on the basis of the Ready Reckoned issued
Who is required to pay stamp duty and registration fee on purchase or lease of a
flat or office?
A purchaser (whether on first sale from a developer or on the resale of a flat)
or a lessee of a flat or office is required to pay stamp duty and registration fee.
How is stamp duty paid in Maharashtra?
Stamp duty is payable by a pay order/ demand draft. The original instrument can
be franked with the value of the stamp duty.
What is the procedure for registration of an instrument?
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 by themselves
or through their constituted attorney under a power of attorney to admit execution
of the instrument.
A passport size photograph, original power of attorney, personal identification
such as passport or income tax PAN Card, adequate Xerox Copies of the original instrument
are some of the essentials required for registration. After lodging an instrument,
it is registered and seal of the Sub-Registrar is affixed on the instrument, thereafter
the original instrument is returned back to the parties.
Can a person grant a power of attorney for signing and registering instrument?
Yes. Persons residing abroad or those who travel frequently are advised to grant
the power of attorneys to facilitate better management of their flats. The system
promotes transparency in transactions, clearly sets out mutual obligations of parties
and increases clarity in response action, when required.
Which documents should a flat purchaser ask for at the time of booking a flat?
A flat purchaser can ask for the certificate of title issued by an advocate, which
gives the history of the ownership of the land under construction. Other documents
such as applicable municipal approvals and sanctioned plans can also be inspected.
How will a flat purchaser know that his next installment is due?
The sales team communicates with flat purchasers through call letters, telephone
calls and e-mail informing them about outstanding payments towards the cost of the
flat, society deposits and other charges. Receipts are issued from time to time
for payments made by flat purchasers.
How will a flat purchaser know if a building, which is under construction, in which
he has booked a flat, is completed?
After completion of construction of the building, the municipal corporation issues
the occupation certificate. the sales team sends out call letters informing flat
purchasers about the same.
Can a flat purchaser carry out interior decoration works in his flat?
Yes, if such work is permissible as per applicable rules and only after he has complied
with requisite formalities and paid an interest-free refundable security deposit
as well as all other requisite payments. However, changes in outside elevation,
color schemes, grills, RCC framework; plumbing and electrical lines etc. are not
Does a flat purchaser require a No Objection Certificate from the Developer for
availing of a home finance loan?
Yes. FINANCIAL institution requires a No Objection Certificate (NOC) from the Developer
before considering an application for loans.
What formalities does a flat purchaser require to complete before taking possession
of his flat?
Possession of a flat is handed over after receipt of all outstanding dues from a
flat purchaser and completion of documentation. Time is required to clean the flat
and inspect all amenities and fittings jointly with the flat purchaser and complete
other requisite formalities.
a) 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 lakhs, 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 assessee
is also considered under this amount. This deduction is taken from the Gross Total
B) Home Loans
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 turns 65 years of age.
To be eligible for a commercial 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 turns 65 years of age. The loan can
be for the purchase/construction/extension of a non-residential property. A loan
for renovation will only be given at the time when the property has been acquired.
Professionally qualified and self-employed individuals can apply, but a minimum
of 3 year's work experience is a necessary.
The loan amount depends on a number of factors such as age, income, number of dependents,
qualifications, assets and liabilities, income stability, business profits, etc.
However, there are ways in which to increase loan eligibility and amount. If a spouse
or fiancée is earning, applying together as co-applicants can increase chances of
a larger loan amount. In such cases, proof of marriage must be submitted. On the
contrary, if there are any co-owners they must necessarily be co-applicants. Providing
additional security like bonds, fixed deposits, and LIC policies may also help to
enhance eligibility. However, the most important factor in sanctioning loans is
repayment ability. The total cost includes registration charges, transfer charges,
and stamp duties.
C) Documentation Requirements
Documents required for self-employed persons:
- Updated passbook or Xerox copy of the applicant's statement of accounts for the
past 6 months
- A Xerox copy of the applicants ration card
- A profile of the applicant's business mentioning at least the nature of the business,
client list, suppliers, employee strength, geographical spread, etc.
- In the case of a business partnership a copy of the partnership deed, 3 years P
& L a/c, B/S, computation of income certified by a CA and individual computation
of income and tax returns for last 3 years is required
- In the case of a proprietor or professional 3 years P & L a/c, B/S, computation
of income certified by a CA and an income tax return file statement for 3 years
- If the company applying for a loan is a Pvt. Ltd. a remuneration certificate, the
board resolution for fixing remuneration, the company's annual report and individual
IT returns for last 3 years is required
Documents required for employed persons:
- Latest salary certificate or the original slip
- A Xerox copy of Form no.16 A (TDS Form) from the applicants Employer
- The original certificate from the applicant's employer for any other allowances
that are not reflected in the applicant's salary slip
- A Xerox copy of the applicants updated bank passbook or a statement of the applicant's
accounts for last 6 months
- A Xerox copy of the applicant's voter I.D. card or the applicants Company's I.D.
or the applicant's passport/ ration card
- A passport size photograph of the applicant & co-applicant
The loan will be sanctioned after the selection of property and submission of the
required legal documents. The process might take some time as each document needs
to be verified for the safety of the applicant. The 230 A Clearance of the seller
and / or 37I clearance from the appropriate income tax authorities (if applicable)
is also needed. Once the above has been submitted and verified, the registration
of the conveyance deed and investment of the applicant's own contribution and the
loan amount will be disbursed by the bank. The disbursement will be in favor of
Documents required for disbursement:
- Loan agreements
- Disbursement requests
- Post-dated cheques
- Personal guarantor’s documents