Frequently Asked Questions

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Buying Property

Before purchasing an apartment the buyer should consult a competent advocate to do a title and document search of the property they wish to purchase.

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.

While purchasing a property, look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate for advice before purchase.

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. 

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 an apartment on a POA basis is not permitted under the law of the land.

Yes, a POA can be either revocable or irrevocable, depending on what sort of a POA one has made.

A freehold property (plot or a Apartment) 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.

POA cannot be converted into anything. Leasehold properties of DDA in Delhi can be converted to freehold, as per provisions.

Comprehensive services in the real estate sector are provided by several brokers in various cities of India. A list of brokers is provided on
under directory of services. 

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 Apartment 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 that 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 of 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.

Housing Loans

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.

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.

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.

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.

A fixed rate home loan, is a loan where the interest rate is constant over the entire tenure of the loan tenure.

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.

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.

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

There is restriction on transfer of immovable property under Section 269UC of the Income Tax act.

Under Section 80C 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.

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.

What are the tax implications of sale of any house property, commercial or residential ?

You are liable to pay Tax on profit arising from sale of a house property under the head Capital Gain.

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.


Generally, an Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad or a person who is not resident in India for a period over 182 days is a non-resident Indian. Persons posted in U.N. organisations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents.
Generally, under the provisions of Foreign Exchange Management Act a person of Indian Origin is an individual (other than a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan) who at any time held an Indian passport, or He or his father or his grandfather was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955).
NRIs and POIs do not require permission from RBI to acquire residential / commercial premises in India (other than agricultural land/farm house/plantation property). A person resident outside India acquiring property to carry on business from India has to file with the Reserve Bank a declaration in Form IPI within ninety days from the date of acquisition of immovable property. A citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan cannot acquire immovable property without prior permission of Reserve Bank. However, he can take on lease an immovable property for not more than 5 years.

A person resident outside India who is a citizen of India is permitted to sell immovable property in India other than agricultural/plantation/farm house to a person resident in India or to an NRI or to a PIO resident outside India. He can also gift residential or commercial property in India to a person resident in India, NRI or to a PIO resident outside India. However, he can gift or sell any agricultural land/farmhouse/plantation property only to a person resident in India who is a citizen in India.

A PIO resident outside India is permitted to sell the immovable property other than agricultural land/farmhouse/plantation property to a person resident in India.

The repatriation of sale proceeds of immovable property other than agricultural land / farmhouse / plantation property may be remitted out of India on fulfilling the following conditions.

The immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition.

The amount to be remitted does not exceed (a) the amount paid in foreign exchange for purchase of the immovable property received through normal banking channels or out of funds held in Foreign Currency Non-Resident account or (b) the foreign currency equivalent as on date of payment made for acquisition of property out of funds held in Non Resident External account.

The remittance of sale proceeds in case of residential property is restricted only to two properties. Reserve Bank has further liberalised the provisions regarding remittance. Accordingly, Authorised Dealers may allow the repatriation of funds out of balances held by NRIs/PIOs in the Non-Resident Ordinary Rupee (NRO) Accounts up to US$ 1,00,000 per year, representing sale proceeds of immovable property, held by them for a period of not less than 10 years subject to payment of applicable taxes.

The Reserve Bank of India has issued the following guidelines for granting housing loans to Non-Resident Indians:

Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.

Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.

Yes. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the borrower's NRE/FCNR/NRO accounts.
Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.
Yes. Normally it is desirable to appoint a Power of Attorney in India to represent you in dealings in India. The Power of Attorney should be executed as per drafts provided by the housing finance company. The Power of Attorney holder should be a trustworthy person.
Yes. General permission has been granted by Reserve Bank to non-resident persons (foreign citizens) of Indian origin to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organisations subject to the condition that the provisions of any other laws, including Foreign Contribution (Regulation) Act, 1976 and stamp duty laws, as applicable, are duly complied with.
Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation subject to payment of taxes and production of a certificate issued by a chartered accountant with the guidance of an Authorised Dealer such as a bank for completion of formalities.
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR/NRO accounts maintained with banks in India.

Note: For remittance, generally one has to approach 'authorised dealer' e.g. a bank permitted to deal in foreign exchange.

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