Q2. 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.
Q3. 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.
Q4 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.
Q5. What are 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.
Q6. 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.
Q7. 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.
Q8. 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.
Q9. 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.
Q10. 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.
