Salaried NRI Applicants:
1) Copy of valid passport showing VISA stamps; Copy of valid visa/work permit/equivalent document supporting the NRI status of the proposed account holder; Latest contract copy evidencing salary/salary certificate/wage slips;
2) Overseas bank A/C for the last three months showing salary credits.
Self Employed NRI Applicants:
1) Trade license or equivalent document;
2) Six months overseas bank account statement and NRE/NRO account.
3) Computation of income, P&L account and balance sheet for last three years certified by a C.A./CPA or any other relevant authority as the case may be (or equivalent company accounts).
4) Passport copy with valid visa stamp.
5) Brief profile of the applicant and business.
The Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions. 18. Can an authorized dealer grant a housing loan to NRIs where he is a principal borrower with his resident close relative as a co-signer / guarantor or where the land is owned jointly by such NRI borrower with his resident close relative? Yes However in such cases the payment of margin money and repayment of loan installments should be made by the NRI borrower.
The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to NRI nationals for acquisition of a NRI house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors’ NRE/FCNR/NRO accounts.
Yes, Reserve Bank has granted general permission for letting out any immovable properties in India. The rental income or proceeds of any investment of such in-come are eligible for repatriation.
Yes, Repatriation of original NRI investments in respect of Indian properties purchased by NRIs on or after 26 May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the NRI property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, which ever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8.
Yes, NRI properties in India may be disposed of.
Yes, under the general permission granted by The Reserve Bank, property other than agricultural land/farm house/plantation property can be acquired by NRIs provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser’s NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.
Yes General permission has been granted by Reserve Bank to non-resident persons (foreign citizen) of Indian Origin (PIOs) to transfer, by way of gift, immoveable property held by them in India to relatives and charitable trusts / organizations subject to the condition that the provisions of all other laws, as applicable are complied with.
Yes, Reserve Bank has granted general permission to NRIs to acquire or dispose of NRI India Properties in up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin (PIO) whether resident in India or not, provided gift tax has been paid.
Applications for necessary permission for remittance of sale proceeds from NRI Real Estate in India should be made in form IPI 8 to the Central Office of The Reserve Bank at Mumbai within 90 days of the sale of the property.
Applications for repatriation of sale proceeds of property in India are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount on the NRI property, whichever is later.
In respect of residential NRI real estate purchased in India on or after 26 May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange of the acquisition of the NRI property for two such NRI properties. The balance amount of sale proceeds if any or sale proceeds in respect of NRI Real Estate Investments purchased prior to 26 May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.
Yes. Reserve Bank has granted general permission for sale of NRI properties. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.
They are required to file a declaration in form IPI 7 with Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable NRI India properties or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
The purchase consideration should be met either out of inward remittance in foreign exchange through normal banking channels, or out of funds from NRE/FCNR accounts maintained with banks in India.
A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal) is deemed to be of Indian origin if:
- He held an Indian Passport at any time or;
- He or his father or paternal grandfather was a citizen of India by virtue of the constitution of India or the Citizenship Act, 1955.
Yes. However, the Reserve Bank has granted general permission to NRI citizens, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain separate permission of The Reserve Bank.
Under the Foreign Exchange Regulation Act of 1973, Non-Resident Indians are:Indian citizens who stay abroad for employment or carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad; OR Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources; OR Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP) OR Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.
A buyer may ask for photocopies of original sale deed, tax paid receipts, encumbrance certificate.
- List out all deeds of title related to the property under sale. You may be required to give photocopies of the deeds to the potential purchaser. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale.
- Prevailing market rates in the vicinity, current market trends and last known transactions.
- Formulate commercial terms i.e. price, payment schedule, transfer fees, statutory charges eg. stamp duty. Distinguish between negotiable and fixed terms and conditions of the contract eg. Price, payment schedule, time of completion etc.
- Avail of services of Propmart.com. Get assistance from Propmart to get best value of your property and hassle free transaction.
- Finalise commercial terms of sale.
- 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. - Check if the purchaser will be taking a loan for payment of the consideration amount. Ask for a pre approval letter from the lending institution.
- Permanent Account Number of Purchaser under Income Tax law.
- Payment of stamp duty on the formal agreement or document for transfer of the property, signing of document by both parties and registration.
- After receiving the entire sale price hand over legal possession of the property alongwith documents of title in original.
- Change name of the holder of the property to the purchaser in the records of the society, electricity company, municipal corporation, Index II etc.
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.
Yes. Registration of sale/transfer documents will involve payment of registration fee, as prescribed in the Registration Rules and as applicable in the States in India, where the Property is situated.
Yes. Documents for sale/transfer of any immovable property of the value exceeding INR 100/- are to be compulsorily registered in the jurisdictional office of the Registrar of Sub Assurances.
The sale of immovable property is concluded on payment of the entire consideration amount, registration of the document of sale and handing actual possession of the property to the purchaser.
Yes. Market value of an immovable property is available for factors such as age of the building, lift, non-RCC structure, locality (e.g. slum land).
Market value of the property as ascertained by the stamp duty authorities on the basis of a ”Ready Recknor” which gives the per sq. mtr. value of each village, zone and sub-zone . But the ready recknor is not conclusive and is merely a guideline for the stamp office.
Generally, the consumer i.e. purchaser or lessee of the property is liable to pay stamp duty unless there is any contract to the contrary then the stamp duty will be paid according to the terms of the contract e.g. the stamp can be payable in equal shares.
Stamp duty is payable on the market value or consideration amount mentioned in the instrument, whichever is higher. Ideally stamp duty should be paid prior to signing the instrument.
An instrument, which is not registered, is inadmissible as evidence.
Yes. A Deed of Confirmation with the original document attached is signed and registered.
Every document which is required to be registered under the Registration Act, except a Will, should be presented at the office of the Sub Registrar of Assurances for the registration within the prescribed time of four months from the date of its execution. A document is registered with a sub-registrar of a district in which the immovable property is located.
The following are the pre-requisites for registration of a document for sale in Maharashtra:-
- Duly completed, stamped and signed instrument printed on single side only.
- Receipts for payment of Stamp Duty and Registration Fees.
- Property Register Card
- Commencement Certificate issued by the Municipal Corporation for premises in a building under construction and Occupation Certificate for a completed building.
- Property Tax Bill in case of depreciation in market value for old buildings.
The registration fee in case of sale of immovable property is 1% of the market value or Rs 30,000, whichever is lower. There could be some additional charges for scanning of documents were the office of the Sub Registrar has been computerised.
The following documents are required to be registered compulsorily under the Indian Registration Act, 1908:
(a)Instrument of gift of immovable property;
(b)Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
(c)Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest;
(d)Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does no exceed Rs. 50/- .
(e)Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
(f)Authorities to adopt a son that is not conferred by a will.
Keep the loan period constant and calculate the total amount paid for the home through the different loan options available.
The amount of home loans granted by various financial institutions generally is between 2 lakhs to one crore and between 70% to 100% (under special schemes) of the purchase price.
EMI – Equated Monthly Installments, is the amount payable to the Housing Finance Institution every month, till the loan is paid back in full, comprising of portion of interest and principal. EMI is to be paid every month through post dated cheques or through direct deductions from the salary.
Processing Charge: It’s a fee payable to HFC on applying for a loan. It is either a fixed amount not linked to the loan or may also be a percentage of the loan amount.
Pre-payment Penalties: When a loan is paid back before the end of the agreed duration, a penalty is charged by some banks/companies, which is usually between 1% and 2% of the amount being pre-paid.
Commitment Fees: Some institutions levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
Miscellaneous Costs: It is quite possible that some lenders may levy a documentation or consultant charges.
Registration of mortgage deed.
The main security for a home loan is the first mortgage of the property to be financed, normally by way of deposit of title deeds and /or such other collateral security as may be necessary. In addition interim security may be required, if the property is under construction. The documents of title will be kept in the safe custody of the HFC until repayment of the loan.
Monthly rest: the interest is calculated on the outstanding principal loan at the beginning of every month.
Annual rest: the interest is calculated on the outstanding principal loan at the beginning of every year.
Most Housing Finance Companies offer the fixed rate as well as the adjustable rate (Variable – Floating rate) home loan to customers
Fixed rate: where the rate of interest charged by the HFC on the loan is constant over the tenure of the loan.
Variable rate :Commonly known as Floating Rate, where the rate of interest charged by the HFC on the loan keeps changing with respect to the rates in the market over the tenure of the loan.
The amount of the loan for each individual depends on the following factors:-
- An Indian resident or NRI
- The income of the family applying for the loan.
- Above 21 years of the age at the commencement of the loan.
- Below 65 years when loan matures.
- Number of dependants.
- Qualifications.
- Assets and liabilities.
- Either salaried or self employed
Yes, you can repay a loan ahead of schedule. Some HFCs charge a pre-payment penalty.
Sec.111 of the Transfer of Property Act, gives the circumstances in which a lease could be determined. These circumstances could be summarized as under:-
(a)on the expiry of the period of lease;
(b)on the happening of the event, which is a condition for expiry;
(c)on the happening of such event when the lessor’s interest in the property terminates;
(d)when the persons holding the ownership and the lease become one and the same person at the same time and in the right; this state is also known as `merger’;
(e)when the lessee expressly yields up its interest to the lessor;
(f)implied surrender i.e. by the creation of new relationship e.g. where the lessee becomes the mortgagee, the latter’s rights remain in abeyance because the larger rights as the mortgages come into effect. The rights as the lessee are restored when the mortgagee is redeemed.
(g)Lessee breaking the express condition giving the lessor a right to re-enter, lessee setting up an adverse title i.e. a title in himself or in a third party or upon the lessee being adjudged insolvent whereupon lease stipulates for a right of re-entry upon the lessor & which is followed by the lessor giving to the lessee notice to determine. This is technically known as forfeiture;
(h)On the expiry of the notice to determine the lease or to quit or of information to quit duly given by either party to the other.
You should learn as much as you can about the condition of the premises before you hire it. You need to investigate the condition of the property and all its systems such as :-
- plumbing systems, drainage, water faucets and sanitary fittings.
- electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings
- roof, walls, ceilings, floors, paintwork.
- foundation, basement and visible structures.
- doors and windows, latches, locks.
- structural stability of the building.
- fixtures and fittings
- electrical load
- water supply.
Documents generally prevalent for renting residential premises can be a lease, leave and licence agreement, paying guest or caretaker agreement.
Documents generally prevalent for renting offices or shops can be a lease, leave and licence agreement, business centre agreement or conducting rights agreement.
Non occupancy charges are levied by the society when the flat owner himself does not reside in the flat but rents it out to a third party.
Rent for a premises can be charged either on floor area or lumpsum charge for the premises. Usually office or shop premises are charged rent on floor area.
Some of the factors a lessee or occupant must keep in mind while rent a flat or office is:
- Locality i.e. transport, schools, hospitals, market, business district, entertainment centres, hotels, restaurants, pollution levels
- Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
- Car parking space
- State of the premises, quality of construction, fixtures and fittings in the premises
- Reputation of the Lessor
- Sufficient water and electric supply, other utilities
- Cost components: rent, stamp duty, registration charges, transfer fees, monthly outgoings and society charges, costs of utilities.
- Any other distinguishing features or advantages of the property
Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed and mutually agreed by the Lessor and lessee. The land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property.
A khata is an account of assessment of a property for the payment of tax. The khata does not confer ownership. However, the title deed is the document through which a person derives a title or ownership of the said property.
A Khata is an account of assessment of a property, recording details about the property such as size, location, built up area and so on for the purpose of payment of property tax. It is also a kind of identification of the person who is primarily liable for payment of property tax. It is one of the required documents in case you require a building licence, trade licence or loan from banks or any other financial institutions.
A draft Sale Deed, containing full details of the parties, advance amount paid, mode of balance amount payable, receipt of the balance amount by the seller, handing over the original documents of the property, handing over the possession of the property, handing over the authorization letter to transfer power and water meters, signing of the application for transfer of khatha, title of the seller of the property, indemnifying the purchaser in case of defect in the title, easement rights, will be prepared by the purchaser’s advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall be signed by the purchaser’s advocate.
Yes. It is important to inspect the property, probably this is the largest single investment you will ever make. You should know all the details of the property and need for any major repairs / modifications before you buy. You can crosscheck the commitment made by builder and actual implementation. A close inspection points out the positive aspects of the property, as well as the maintenance that will be necessary to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase.
Few important points to check while inspecting…
- Plumbing systems, drainage, water faucets and sanitary fittings.
- Electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings
- Roof, walls, ceilings, floors, paint work.
- Foundation, basement and visible structures.
- Doors and windows, latches, locks.
- Structural stability of the building.
This break up is extremely essential as builders can place anywhere from 65% to 85% per cent of the super built area as carpet area. That means, if the price is quoted as 1,000 sq ft super built up area, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the vendor/ builder mention it in the sale deed.
Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
Built up Area is the carpet area plus the thickness of outer walls and the balcony.
Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.
Some important points to keep in mind while buying the flat:
- Locality – Proximity to workplace, educational institutions, hospitals, shopping areas, entertainment centres, transportation, pollution levels.
- Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
- Car parking space
- Quality of construction
- Reputation of the builder or seller
- Sufficient water and electric supply, other utilities
- Cost components: price, stamp duty, registration charges, transfer fees, maintenance charges, any other payments
- Appreciation of the property for resale and rental.
- Any other distinguishing features or advantages of the property