- What documents need to be verified before purchase of a flat?
Ans. 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.
- What is the difference between built-up area, super built-up area, and carpet area?
Ans. 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.
- What important documents should one check for before buying any property?
Ans. 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.
- Who is liable to pay stamp duty, the buyer or the seller?
Ans. The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.
- The stamps are required to be purchased in whose name?
Ans. The stamps are required to be purchased in the name of any one of the executors to the Instrument.
- Which are the instruments that attract payment of stamp duty on?
Ans. The instruments like Agreement to Sell, Conveyance Deed, Exchange of Property, Gift Deed, Partition Deed, Power of Attorney, Settlement and Deed of Transfer of Lease attract stamp duty on market value of the property.
- 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.
- Can I buy a flat on Power Of Attorney (POA) basis?
Ans. Purchasing a flat on a POA basis is not permitted under the law of the land.
- Is a POA revocable?
Ans. Yes, POA can be either revocable or irrevocable, depending on what sort of a POA one has made.
- What exactly do we mean by a free-hold flat? What are the advantages and disadvantages, if any?
Ans. A free hold 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 leasor/leasee involved.
- How to convert a POA flat into a free-hold one?
Ans. POA cannot be converted into anything.
- How does one 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?
Ans. Regarding authenticity of documents, again, you will need to take the help of an advocate to verify.
- A flat in a Co-op Hsg. Society is to be gifted. What are the legal formalities? What about stamp duty?
Ans. 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.
- 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 credentials of the builder?
Ans. When you are in the process of buying a flat from a builder in a building under construction, you need to check for 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 – No Objection Certificate (NOC) (if applicable) has been obtained or not.
- 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?
Ans. Under Section 88 of the income tax you can claim benefit for the principle repayment, interest on loan is deductible under section 24 from income from house property.
- Are the benefits attached to a residential property are also available to a commercial property?
Ans.No such benefits are not available for commercial properties.
- 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?
Ans. You have to obtain Permission under section 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?
Ans. You are liable to pay tax on profit arising from sale of a house property under the head Capital Gain.
- Whether incidental charges like brokerage, registration fees, stamp duty and other charges arising out of sale of house property deductible from profit arising on sale?
Ans. These expenses are allowable expenses from the full value of consideration of the sale of house property.
- Is there any way by which I can claim exemption from tax on capital gain?
Ans. The Income Tax Act has made provision under sections 54, whereby you can claim exemption from tax on capital gains.
- Section 54 – Purchase or construct another residential house worth the amount of capital gains.
- Section 54 protects capital gains arising out of sale (or transfer) of a residential house whether self-occupied or not, provided the assesse 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 capital gain earned during the year in which the new asset is sold. This condition is unfair.