Various varieties of housing loans are offered by different financial institutions. Prominent among these are:
Home Loans
This is the basic housing loan for the purchase of a new home, which covers the cost of the flat, deposits and charges, stamp duty and registration charges.
Home Improvement / Extension Loans
These are for the purpose of undertaking repair works and renovations in a home that is already owned by you.
Bridge Loans
Bridge loans are for people who wish to sell their existing house and purchase another one and need finance for the new house until a buyer is found for the old one.
Balance Transfer
A balance transfer indicates the paying off of an existing housing loan and availing of a loan with a lower rate of interest.
Refinance Loans
Refinance loans are taken to pay off the debt incurred from private sources such as relatives and friends, for the purchase of your present house.
Loans To NRIs
These loans are designed as per the requirements of NRIs who want to buy a house in India.
Processing Fees are payable to the lender on applying for a loan and can either be a fixed amount not linked to the loan or may also be a percentage of the loan amount.
Prepayment Penalty between 1% and 2% of the amount being prepaid is charged by some institutions when a loan is paid back before the end of the agreed duration. Many banks now don't levy penalty on partial prepayment.
Franking Charges as per prevailing rate of Government Authority.
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Photographs
Proof of age
Proof of age
Proof of residence
For salaried individuals: Latest salary slip
Last 2 years form 16 or equivalent
Bank statements reflecting salary credits for the previous six months
For self-employed individuals: Certified copies of balance sheet
Profit and loss statement
Tax challans / tax returns for the previous 3 years
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For partnership/private limited companies: The Articles of Association
Partnership deed and details about the firm
For NRIs Latest salary certificate specifying, name (as it appears in the passport)
Date of joining
Passport number
Designation
Perquisites and salary
Photocopy of labour card/identity card
Photocopy of valid resident visa stamped on the passport
Photocopy of monthly statement of local bank account
Property related documents
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In the case of self-occupied property acquired or constructed out of borrowed funds, the deduction available for interest on capital borrowed is Rs. 1,50,000/-. In case of a rented property, the whole of the interest amount is allowed as deduction. The interest on borrowed funds in pre-construction period is allowed over a 5-year period commencing from the previous year in which the house is acquired or constructed.
The limit of repayment of housing loan qualifying for deduction u/s 80C is Rs. 1,00,000/- (including Stamp Duty, Registration Fee incurred for the purpose of transfer of such residential house property).
Section 54 of the Income Tax Act provides relief to an individual or Hindu Undivided Family from capital gains arising from transfer of a residential house held by the assessee at least for a period of 36 months. Such capital gains to the extent utilised for purchase (within 1 year before or 2 years after the date of sale) or construction (within 3 years of date of sale) of a residential house is exempt u/s 54. If the amount of capital gains is proposed to be utilised, but is not so utilised up to the due date for filing of return then, the amount of unutilised capital gain is required to be deposited in the "Capital Gains Account Scheme, 1988".
Section 54F of the Income Tax Act exempts long term capital gains arising from transfer of any long term capital asset other than a residential house. Such capital gains to the extent utilised for purchase (within 1 year before or 2 years after the date of sale) or construction (within 3 years of date of sale) of a residential house is exempt u/s 54F. To be entitled to this exemption the assessee should not own more than one residential house other than the house sold as on the date of transfer. The provisions of depositing the unutilised capital gain in the "Capital Gains Account Scheme, 1988" as explained above is also applicable.
Section 54EC of the Income Tax Act provides relief from capital gains arising from transfer of any capital asset on or after 1st April 2000 shall be exempt to the extent such capital gain is invested within a period of 6 months after the date of such transfer in the long term specified asset provided such specified asset is not transferred or converted into money within a period of 3 years from the date of its acquisition. However, the investment made on or after 1st April 2007 in the long term specified asset by assessee during any financial year cannot exceed Rs. 50 lakh. For claiming this exemption, the capital gains have to be invested (investment not to exceed Rs. 50 lakh) within 6 months of the date of transfer in notified bonds issued by:
The Act applies to the whole of the State of Maharashtra.
An "instrument" includes every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a Bill of Exchange, cheque, Promissory Note, Bill of Lading, Letter of Credit, Policy of Insurance, Transfer of Share, debenture, proxy and receipt.
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 sold 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 Reckoner issued each year. Depreciation in stamp duty is available for old buildings and building without lift.
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 sold 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 Reckoner issued each year. Depreciation in stamp duty is available for old buildings and building without lift.
All instruments are liable to be stamped before or at the time of execution of instrument or immediately thereafter on the next working day following the date of execution, when executed in the State of Maharashtra. Any instrument executed outside the state is liable to duty only on receipt of such instrument in the state, provided it relates to a property situated in the state, or a matter or thing to be done in the state. Stamp duty is not levied on a transaction, but on an instrument.
Stamp duty is payable at the rate mentioned in the Bombay Stamp Act, 1958 and as amended from time to time.
Documents listed in Section 17 of the Indian Registration Act, 1908 are to be registered compulsorily. Registration of documents listed in Section 18 of the Indian Registration Act, 1908 is optional. An agreement for leave and licence is required to be compulsorily registered under the Maharashtra Rent Control Act, 1999.
Please click on the links below to view Statutory Payments :
Notice of Motion No. 100 of 2011 in Writ Petition No. 1456 of 2010 (Service Tax)
Interim order of the Honourable Bombay High Court on Service Tax
MVAT is applicable on all residential apartments sold after 1st April, 2010 at the rate of 1% of the Market Value of the property or Agreement Value, whichever is higher.
Service tax for Bundled Services (construction service + preference location) provided @ 3.09% of Agreement Value (conditions apply).
Service tax on Society Charges @ 12.36% (conditions apply).
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.
When buying property from a developer, you are entitled to question the company for their permissions and approvals for the property in question. A builder must have a ULC Order (though not always), IOD and CC for the project and the MCGM approved plans in order to begin construction.
Practically every developer has to form a Co-operative Society at one point of time or another. With the limited amount of options available with regard to management of the affairs of the building i.e. (a) condominium (b) Private Limited Company and (c) Co-operative Society, (excluding the unrealistic rental housing), it willnot be an exaggeration to state that in at least 90% cases particularly in Mumbai, the Promoters and / or the Builders have formed a Co-operative Society. The basic requirements for Registration of Co-operative Housing Society normally is not known to the flat purchasers. It is here that apart from the statutory obligations cast upon the builder, the builder as a friend, philosopher and guide of promoters helps in forming a Co-operative Society.
The procedure for Registration of a Society begins with electing a Chief Promoter in a meeting of the Promoters. The builder under the Flat Owners type of Co-operative society has the first right to act as the chief promoter. The developer / flat purchasers should call for a meeting of the Promoters by issuing the notice under Agenda of the meeting giving at least 14 days notice tothe Promoters. In this meeting, a Chief Promoter is elected who can exercise such powers and carry out such functions as are mentioned in the minutes of the Promoters of the proposed Co-operative Society. After electing the Chief Promoter, the proposed name of the society has to be decided by the Promoters.
Normally, the same reservation proposal should be accompanied with the signature of at least 10 Promoters who have attended the meeting. It is a common belief that the Society should consist of at least 10 members. If the number is less than 10 then special permission from Government has to be taken. In such cases, the garages / car parking may be allotted to other relatives of the promoter to reach number of 10. it would be of interest to note that the model bylaws define flat as a "Flat means a separate set and self-contained set of premises used or intended to be used for residence, or office or show-room, or shop, or godown and includes a garage, or dispensary, or consulting room, or clinic, or flour mill, the premises forming part of a building and includes an apartment". On allotment of name and permission to open a bank account by the Registrar, the Chief Promoter has to collect Share Capital, Entrance Fees from promoters and deposit the same in the branch of the bank permitted by the Registrar. It should be noted that the amount cannot be withdrawn from the Bank till the Society is Registered or its Registration is refused, except with prior written permission of the Registrar. The Chief Promoter should submit Registration Proposal to the Registering Authority within a period of 3 months from the date of issue of Letter of Reservation in the name of the proposed society.
The documents that are normally to be submitted to the Registering Authorities are as under :
It is the duty of the Registrar to register the society and on registration of the society, it becomes a seperate legal entity. Thereafter, the management of the affairs of the society is carried out by the managing committee which is elected by the general body meeting of the society. It may be of interest to note that in a co-operative society, the principle is one member one vote. In a co-operative society, the right to be exercised in the general body meeting is a personal right. This is one of the reasons why even a person holding a power of attorney cannot attend the general body meeting of the society. The quantum of the capital being introduced by the member is not of much importance. Preference should be given for formation of a private limited company if one member proposes to acquire majority of the flats.
The documents that are normally to be submitted to the Registering Authorities are as under :
Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.Carpet Area : This is the area of the Apartment / Building which does not include the area of the walls. Built up Area : This includes the area of the walls also.
Super Built up Area : This includes the Built up Area along with the area under common spaces such as the Lobby, Lifts, Stairs etc. This term is therefore only applicable in the case of multi-dwelling units.
If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
The liability of paying Stamp Duty is that of the buyer unless there is an agreement to the contrary. Section 30, of the Bombay Stamp Act, 1958 states the liability for payment of Stamp Duty.
The Stamps are required to be purchased in the name of any one of the executors to the instrument.
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 which ever is higher.
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.
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.
Purchasing a flat on a POA basis is not permitted under the law of the land.
A freehold property (plot or a flat) is one where there is a whole and sole owner(s) ownership is full and unconditional (within the provisions of the laws of the land) and there is not lessor / lessee involved.
POA cannot be converted into anything. Leasehold properties of DDA in Delhi can be converted to freehold, as per provisions.
Regarding authenticity of documents, again you have to take the help of an advocate to verify.
Comprehensive services in the real estate sector are provided by several brokers in various cities of India. In the directory of services onour portal www.indiaproperties.com you can find a list of them and you can contact them directly.
Gift of an immovable property is considered as a 'transfer' under the provisions of the TOP Act and you have to have the transaction registered through a Gift Deed and pay Stamp Duty as per provisions of the relevant Stamp Act depending in which state the property is situated.
When you are buying a flat from a builder in a building under construction, you have to check the following : Approved Plan of the Building along with the number of floors. Ensure that the Floor what you are buying is approved. Check if 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. Check 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 Specifications given in the Agreement to sell off the Sale Brochure. Is he providing the same actually on the ground or not? Check the Reputation of the Builder. Ensure that Urban Land Ceiling NOC (if applicable) has been obtained or not. NOC from Water and Electricity Authorities also have to be obtained. NOC from lift authorities.
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