Faq's
Click on the category of your interest to know answers to Frequently Asked Questions.
Buying Property |
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For answers click on the image next to the question of your choice. |
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Which documents are to be verified before purchase of a Flat ? |
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What is the difference between built up area, super built up area, and carpet area? |
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What are all the important documents one should check before buying any property? |
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Who is liable to pay Stamp Duty - the buyer or the seller ? |
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In whose name are the stamps required to be purchased ? |
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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 ? |
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Which are the instruments that attract the payment of Stamp Duty ? |
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Who is the appropriate authority for knowing the market value of the property ? |
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What are the risks associated in buying a flat on Power Of Attorney (POA) basis ? |
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Is a POA revocable ? |
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What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any ? |
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How to convert a POA flat into a Free Hold one ? |
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How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party ? |
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Do we have any agency in Delhi which can provide a comprehensive service under one roof for hassle free purchase of society flats for its customers ? |
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A flat in a Co-op Hsg. Society is to be gifted. What are the legal formalities? What about stamp duty ? |
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Upon buying a flat from a builder in a building under construction, what are the permissions and papers that one should check with the builder, so as to ascertain the genunity of the builder ? | |
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Which documents are to be verified before purchase of a Flat ? |
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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. |
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What is the difference between built up area, super built up area, and carpet area? |
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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 alongwith 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. |
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Who is liable to pay Stamp Duty-the buyer or the seller? |
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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. |
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Who is liable to pay Stamp Duty-the buyer or the seller? |
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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. |
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In whose name are the stamps required to be purchased ? |
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The stamps are required to be purchased in the name of any one of the executors to the Instrument. |
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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 ? |
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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. |
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Which are the instruments that attract the payment of Stamp Duty ? |
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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. |
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Who is the appropriate authority for knowing the market value of the property ? |
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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. |
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What are the risks associated in buying a flat on Power Of Attorney (POA) basis ? |
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Purchasing a flat on a POA basis is not permitted under the law of the land. |
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Is a POA revocable ? |
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Yes, a POA can be either revocable or irrevocable, depending on what sort of a POA one has made. |
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What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any ? |
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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 no lessor / lessee involved. |
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How to convert a POA flat into a Free Hold one ? |
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POA cannot be converted into anything. Leasehold properties of DDA in Delhi can be converted to freehold, as per provisions. |
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How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party ? |
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Regarding authenticity of documents, again, you have to take the help of an advocate to verify. |
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Do we have any agency in Delhi which can provide a comprehensive service under one roof for hassle free purchase of society flats for its customers ? |
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Comprehensive services in the real estate sector are provided us. In our portal www.equaterealtors.com you can find a list of properties with their details. |
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A flat in a Co-op Hsg. Society is to be gifted. What are the legal formalities? What about stamp duty ? |
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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. |
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Upon buying a flat from a builder in a building under construction, what are the permissions and papers that one should check with the builder, so as to ascertain the genunity of the builder ? |
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When you are buying a flat from a builder in a building under construction, you have to check the following: |
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Approved plan of the building along with the number of floors. |
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Ensure that the floor that you are buying is approved. |
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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. |
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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. |
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Check specifications given in the agreement to sell of the sale brochure. Is he providing the same actually on the ground or not |
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Check the reputation of the builder. |
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Ensure that urban land ceiling NOC (if applicable) has been obtained or not. |
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NOC from water and electricity authorities also have to be obtained. |
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NOC from lift authorities. | |
Renting Property
For answers click on the image next to the question of your choice.
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Is there a provision by which a landlord is bound to spend a certain percentage towards the maintenance of his property ?
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If a property is kept vacant for a period of one year, can it be let out at market rent ? |
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How does one determine the market rent ?
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How many months rent can the landlord take as deposit ? |
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In case a tenant is not protected by the Rent Act, what is the procedure to ask him to vacate and what is the notice period required to be given ? |
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I had a lease agreement for 6 years for a shop with a built in escalation clause @ 20% after 3 years. My lease expired on 31.3.2000 and my landlord has sent a written letter asking to pay rent at an enhanced rate. Is this sufficient to continue my lease or should I enter into another lease ? If I continue on the strength of this letter, are my rights affected ?
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Is there a provision by which a landlord is bound to spend a certain percentage towards the maintenance of his property ? |
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No |
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If a property is kept vacant for a period of one year, can it be let out at market rent ? |
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Yes |
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How does one determine the market rent ? |
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There is no prescribed manner but it can be easily found out by approaching such people as the brokers, registration authority, and appropriate authorities etc. |
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How many months rent can the landlord take as deposit ? |
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Three months. |
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In case a tenant is not protected by the Rent Act, what is the procedure to ask him to vacate and what is the notice period required to be given ? |
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Normal procedure is to send a notice to the tenant, failing which a court case may be filed which usually takes 10 to 20 years to reach a verdict. |
Housing Loans
For answers click on the image next to the question of your choice.
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How much housing loan can one get ? |
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What are the tax benefits that are available if one avails of housing loan ? |
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What is reducing balance ? |
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Which loan is cheaper the monthly reducing balance or the annual reducing balance ? |
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What is a fixed rate home loan ? |
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What is a floating interest rate ? |
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What is a home Extension Loan ? |
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What is home Improvement Loan ? |
QHow much housing loan can one get ?A
Housing loan will be sanctioned depending upon your repayment capacity and according to your income. Your spouse's income can be included, if you want to increase the amount of your loan. The maximum loan that can be sanctioned varies with housing finance companies and ranges from Rs.10 lakh to Rs.1 crore.
QWhat are the tax benefits that are available if one avails of housing loan ? A
Tax benefits are available on both the principal and interest components of the loan as per the income tax act. The upper limit of the amount of deduction of interest repayment allowed from your gross total income is now Rs. 75,000 p.a.. Besides, Sec. 88 offers you tax benefits for principal repayments. The principal repayment amount included in the overall limit of Rs 60,000 offered by this section is Rs 10,000.
QWhat is reducing balance ?
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Reducing balance is the method of reducing the principal amount already paid, from the outstanding loan amount. Every time you make a payment,you pay interest on that part of the original principal sum that has remained un-repaid till then. Q Which loan is cheaper the monthly reducing balance or the annual reducing balance ? A The best way is to compare the EMIs and the tenures of the two home loans. The loan carrying the lower EMI for the same tenure is the cheaper option.
QWhat is a fixed rate home loan ?
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A fixed rate home loan, is a loan where the interest rate is constant over the entire tenure of the loan tenure.
QWhat is a floating interest rate ?A
A floating interest rate loan, is a loan where the interest rate payable is linked to the market rate like the bank lending rate. As the bank rate varies, the interest rate payable by you will also rise and fall. Hence you will have to bear the risk of interest rate fluctuations, the floating interest rates offered are slightly lower than the fixed interest rates.
Q What is a home Extension Loan ?
A home extension loan is a loan which helps you to meet the expenses of any alteration like extension/expansion or modification of your home. You can avail of a home extension loan, after obtaining the requisite approvals from the municipal corporation.
Q What is home Improvement Loan ?
A home improvement loan is one that is made available for you to do certain external work like structural repairs, waterproofing or internal work like tiling and flooring, plumbing, electrical work, painting, etc.
Tax Related Matters
For answers click on the image next to the question of your choice. Income Tax relating to Transfer of Immovable Property
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Is it necessary to obtain any permission, from the Income Tax authorities if I want to purchase any immovable property ? |
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Does the Indian Income Tax Act offers any special incentive for purchase of residential property by obtaining finance either from banks or other financial institutions ? |
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Whether the benefits attached to a residential property are also available to a commercial property ? |
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What are the formalities specified under the Indian Income Tax Law, if any, that one has to complete before or after selling any house property, commercial or residential ? |
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What are the tax implications of sale of any house property, commercial or residential ?
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Whether incidental charges like brokerage, registration fees, stamp duty and other charges arising out of sale of house property deductable from profit arising on sale ? |
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Is there any way by which I can claim exemption from tax on capital gain ? |
QIs it necessary to obtain any permission, from the Income Tax authorities if I want to purchase any immovable property ?A
There is restriction on transfer of immovable property under Section 269UC of the Income Tax act.
QDoes the Indian Income Tax Act offers any special incentive for purchase of residential property by obtaining finance either from banks or other financial institutions ?A
Under Section 88 of the income tax you can claim benefit for the principle repayment, interest on loan is deductible u/s 24 from income from House Property.
QWhether the benefits attached to a residential property are also available to a commercial property ?
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No such benefits are not available for commercial Properties.
Q What are the formalities specified under the Indian Income Tax Law, if any, that one has to complete before or after selling any house property, commercial or residential ? A You have to obtain Permission u/s 230A of the Income Tax Act if the value of the property to be sold is more than 5 lakh. Q
What are the tax implications of sale of any house property, commercial or residential ? A
You are liable to pay Tax on profit arising from sale of a house property under the head Capital Gain.
QWhether incidental charges like brokerage, registration fees, stamp duty and other charges arising out of sale of house property deductable from profit arising on sale ?A
These expenses are allowable expenses from the full value of consideration of the sale of house property.
QIs there any way by which I can claim exemption from tax on capital gain ?A
The Income Tax act has made provision u/s 54 & 54A--G of the act whereby you can claim exemption from tax on capital gains.
Sec. 54: Purchase or construct another residential house worth the amount of capital gains. Sec. 54 protects capital gains arising out of sale (or transfer) of a residential house whether self-occupied or not, provided the assessee has purchased within 1 year before or 2 years after the date of sale of the original asset or has constructed within 3 years after that date, a residential house. The only condition is that the newly-acquired property should not be sold within 3 years from the date of its purchase or construction. If this condition is not satisfied, the cost of the new asset is to be reduced by the amount of long-term capital gains exempted from tax on the original asset and the difference between its sale price and the reduced cost will be chargeable as short-term (yes, short-term!) capital gain earned during the year in which the new asset is sold. This condition is unfair. One of my readers, Capt. Shelar, had sold a house situated in a main city and purchased a more spacious house in the suburbs. After moving in he found that one of the neighbours is a goonda and another is running a brothel. He desired to shift in a hurry but alas! He found himself trapped. Sec. 54EA & 54EB: Invest within 6 months the amount of capital gains in avenues covered by Sec. 54EB which locks in the funds for 7 years or invest the of sale proceeds in avenues covered by Sec. 54EA which locks in the funds for 3 years. Sometimes the same avenue also attracts tax rebate u/s 88. However, if the assessee has availed of the Sec. 54EA/EB exemption from capital gains by contributing a certain amount, the rebate u/s 88 will not be allowed on the same amount and vice versa.
Inheritence Of Property
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Immediately after purchasing an ownership flat, my father expired. He had taken HDFC loan and was well aware of the tax provisions. My mother and myself are staying in the flat. I have been paying the Equated Monthly Instalments (EMI) which consist of part interest and part loan repayment. I have been receiving conflicting opinions regarding the deductibility of the interest element and the rebate on loan repayment. Can you give your opinion ? |
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Immediately after purchasing an ownership flat, my father expired. He had taken HDFC loan and was well aware of the tax provisions. My mother and myself are staying in the flat. I have been paying the Equated Monthly Instalments (EMI) which consist of part interest and part loan repayment. I have been receiving conflicting opinions regarding the deductibility of the interest element and the rebate on loan repayment. Can you give your opinion ? |
Selling Property
For answers click on the image next to the question of your choice.
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What is the difference between built up area, super built up area, and carpet area?
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Who is liable to pay Stamp Duty - the buyer or the seller ? |
|
In whose name are the stamps required to be purchased ? |
|
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 ? |
|
Which are the instruments that attract the payment of Stamp Duty ? |
|
Who is the appropriate authority for knowing the market value of the property ? |
QWhat is the difference between built up area, super built up area, and carpet area ?A
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 alongwith 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.
QWho is liable to pay Stamp Duty - the buyer or the seller ? A
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. Top Q In whose name are the stamps required to be purchased ? A
The stamps are required to be purchased in the name of any one of the executors to the Instrument.
QWhat 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 ?A
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.
Q Which are the instruments that attract the payment of Stamp Duty ?
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.
QWho is the appropriate authority for knowing the market value of the property?A
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. |
