• Check for proper conveyance of Title in favor of the builder.
• Check the license/development right/approvals of the builder.
• Check clear and marketable title of the project.
• Ensure execution of proper Allotment Letter/Sale Agreements on your payments.
• Ensure whether reputed financial companies approve the project. This will help you in getting financial loans.
• Check the tentative layout/building plan and verify the plinth area of the apartment. It is advisable to check the carpet area of the apartment and find out if the difference between plinth area and carpet area is reasonable.
• Ask for Occupation/Completion Certificate.
• Ensure the Conveyance Deed is registered after the entire payment has been made.
• For buying a property you need to check Deed of Conveyance, Mutation Certificate (for complete property), Land Registration Status, Sanction Plan, Search Report and Payment Schedule (for under construction). It is a must that you go through all the documents relating to the origin of the property, chain of Title, Occupancy Certificate, sanctions from various authorities dealing with building plans, fire safety and Completion Certificate.
• For re-sale property, check demand notice relating to renovation, tax dues and latest receipts of payments made towards various out-goings such as water, electricity and ground rent.

Carpet area is defined as the precise area within the walls of your home. If you had to lay out a wall-to-wall carpet in your entire home, the area covered would be the carpet area. Built-up area is inclusive of not just the carpet area but also the area being occupied by the walls of your home. Super built-up area takes into account all the area under the common spaces which is the apartment's proportionate share of the lobby, staircase, elevator and the corridor outside the apartment.

The housing society share certificate and the sale/purchase deed of the property are the main documents required to sell a residential property. If the property has been sold and bought multiple times, a copy of the previous deeds may be required to prove the authenticity of the deal. Other than these, copies of Stamp Duty and registered house documents will also be needed. In case of property being mortgaged, these papers will be held by the bank and you can use a photocopy of the required documents to initiate a deal. Depending on the kind of property and ownership, some more documents, such as a No-Objection Certificate from the housing society and a documented consent in case of jointly owned property, may be required.

A Sale Deed is a document prepared on the basis of previous ownership document for the transfer of property from seller to buyer, providing the buyer the absolute and undisputed ownership of property.

During the transfer of property from one to another, the stamp paper and registration fee has to be paid which is equivalent to 7 to 8 per cent of the value of the property or those of circle rates. These rates are the notified rates of a particular area set by the government on which the registration charges on the value of the property are calculated. The circle rates can be seen on government registration and stamp department websites of each city.

Budget, location, type of property, objective of buying and choice of property are the determining factors for purchase of property from an end user's perspective. Real estate values are governed by demand and supply. This may vary on a project to project basis. The projects which see good demand normally do not see a price correction.

• When to Buy?
• What to Buy?
• Where to Buy?
• How to Buy?
• How much to pay for it?
• What type of property to buy?
• How to extract maximum return from your property investment?

There is no harm in renting a property till you are ready with enough finances to buy. If you find a place where you want to stay and can manage to get enough formal finance, look at buying as your monthly outflow will lead to creating an asset. But make sure your EMI is not more than 35-40 per cent of your monthly salary.

Depending on the chosen budget, one can decide the type of property. If you are an end-user, the size of your family, along with the budget can be a determining factor while choosing the type of house you need. There is a wide range to choose from today as the market abounds in various housing formats from 1, 2, 3 and 4BHK apartments, to studios, villas and row houses, to builder floors and independent houses. Multi-storey projects and township with all amenities in one project clubhouse, swimming pool, meditation center, health clubs, departmental stores, schools, cinemas, sports facilities and banquet/party halls are what most end-users are looking at today.

Until the draft real estate regulation bill outlines the obligations of project delivery, buyers will have to rely on their rights laid out in their booking agreements. First and foremost, buyers should scrutinize the project and the background of the developer. If possible, they must hire a real estate consultancy firm who has market expertise and is known for unbiased consulting. In addition, an investor has the right to ask for the copies of approvals of the project, if not buying during a soft launch stage. You must ask for detailed construction schedules and negotiate for penalty clause in case of delay of project. Refunds can be claimed if a project is delayed beyond the period stipulated in the Builder Buyer Agreement by filing a case in the consumer court.

Valuation of property simply means arriving at the actual prevailing cost of the property. It could depend upon number of parameters, location of property being the most important one. One needs to consider other parameters such as age of property, projects available, facilities offered and the sizes available in that project. The latest transaction price of a similar property needs to be considered to arrive at the closest value of the given property.

It is ideal to get the valuation done by a certified valuer for the house as per the ongoing rates. The property valuation reports can be obtained from the architects or a certified valuation expert.

Same documents as above would need to be verified for checking project approvals. Confirm approved plans, other approvals such as environmental clearances are important and NOC from utility companies. Title Search must be carried out at the Sub Registrar’s office to verify title and ascertain encumbrances, if any.

• Approved plans
• Title Certificate from Advocate of current date
• Copy of IOD/Commencement Certificate
• Stamp duty paid receipt
• Demand Draft for payment of Registration fees.
• Property Card showing CTS No. of plot
• PAN cards of Sellers and Buyers
• Khata Extract

• All original chain of agreements form part of the title documents and must be obtained by the buyer.
• Do remember to obtain the original registration receipts and the original stamp duty receipts.
• A letter of possession duly witnessed by two witnesses confirming the physical handover of the premises.
• In case of a Society, the original share certificate together with all transfer forms duly executed.
• Proof of payment of all dues such as maintenance, electricity, phone, water, property taxes upto the date of handing over possession.
• A limited power of attorney from the Seller(s) authorizing the buyer(s) to sign all documents and applications etc. pertaining to the said premises.
• An NOC from the Society or other body confirming that they have no objection to the transfer.

As a general rule the following documents pertaining to immovable property must be registered vide Section 17(1) of the Registration Act, 1908:

• Instruments of gift of immovable property;
• other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees, and upwards, to or in immovable property;
• non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and
• leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
• 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 present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property.

In Maharashtra State, w.e.f. 1-4-2013, the following additional documents are also required to be compulsorily registered:

• agreement relating to the Deposit of Title Deeds, where such deposit has been made by way of security for the repayment of a loan or an existing or future debts;
• Sale certificate issued by any competent officer or authority under any recovery Act;
• Irrevocable Power of Attorney relating to transfer of immovable property in any way, executed on or after the commencement of the Registration (Maharashtra Amendment) Act, 2010.”

A building completion certificate is the final document granted by the plan sanctioning authority and usually follows the occupancy certificate. This document certifies that all acts necessary in connection with the construction of a building are complete.

An occupancy certificate is granted by the plan sanctioning authority once the building is complete and ready for Inhabitation. In some places, an official water connection is granted only after the OC has been obtained. This document is given after verification that the construction has been carried out in accordance with the approved plans. The builder is not entitled to give possession and the unit buyer is not allowed to occupy the unit till the OC has been obtained. Further, the property comes into existence on and from the date of granting of OC. Property taxes are also levied as a unit from the OC date.

A Khata is a record of assessment of a property, giving details of the property such as location, area, usage etc. for the purpose of payment of property tax. It is issued by the Municipal Corporation or other authority entitled to levy property tax such as a Development authority or a Panchayat. The Khata shows who is the registered owner of the property in the records and if you have acquired a property by sale, gift, will, etc. , you should have your name substituted for that of the seller in the Khata. This is another document you must check whilst buying a property to verify the title of the seller.

• Confirm the approved plans from the appropriate authority are in place.
• Check that all other permissions from various authorities are in place. E.g. Utility Companies, Environment clearance, Airport Authority, etc.
• Confirm that the Land title is clear and there is no disputes/litigation (Title Certificate).
• Confirm Builder has the Intimation of Disapproval (IOD) and commencement Certificate (CC) to start construction.
• Have the agreement evaluated by an Advocate. Check possession date promised and provide for penalty if Builder does not deliver as agreed.
• Check and negotiate the payment schedule.
• Do not book in Pre-launch without executing and registering the agreement. In Maharashtra, it is mandatory for Builder to do both at inception stage itself.

Same set of documents as above. The agreement must record the title flow, the various permissions taken and the terms agreed to by the parties. In Maharashtra, the Maharashtra Ownership Flats Act, 1963 prescribes disclosures to be made, documents to be attached and even a model agreement format which is mandatory in part.

• Approved plans
• Title Certificate from Advocate of current date
• Copy of IOD/Commencement Certificate
• Stamp duty paid receipt
• Demand Draft for payment of Registration fees.
• Property Card showing CTS No. of plot
• PAN cards of Sellers and Buyers
• Khata Extract

• Check for a duly stamped registry
• Ensure no dues are accorded to the builder
• Check for seller’s name in municipal records
• Confirm seller’s membership in the society (if formed)
• Ensure there are no pending bills, charges or taxes
• Make sure that the property is mortgage free
• Sanctioned Building Plan (to ensure no unauthorized construction)
• Previous title documents (that chain of title is complete)

Same documents as above would need to be verified for checking project approvals. Confirm approved plans, other approvals such as environmental clearances are important and NOC from utility companies. Title Search must be carried out at the Sub Registrar’s office to verify title and ascertain encumbrances, if any. How to verify the authenticity of the various documents submitted by the seller?-

• Approved plans can be verified from the corporation or other plan sanctioning authority’s office.
• Ownership documents of land or development rights held by the builder can be confirmed from the Sub Registrar’s office where they are registered.
• Society share certificate can be verified from the Society itself.

Many Builders have failed to transfer the buildings to the society or condominium formed by them despite it being mandatory for them to do so. In Maharashtra, the Maharashtra Ownership Flats Act, 1963 permits a Society, Company or Association of members to apply unilaterally for a conveyance if the Builder fails to do so to the competent authority. The Sub Registrar will thereafter register the Conveyance after giving an opportunity to the builder to show cause as to why the conveyance should not be registered. The Conveyance grants title to the Society. Many a time, Societies have found the lack of a conveyance to be a serious impediment when they set out to redevelop or reconstruct the building(s).

No. You cannot sell a property without proper registered document(s). A registered document is the authenticity and guarantee of the ownership over the property. Neither should one sell a property without proper registered documents and neither should one purchase a property wherein the seller does not have registered document of his/her ownership in the Property.

Power of Attorney is the right/authorization given by a property- owner to someone through whom the owner transfers the power and rights to deal with the Property to his/her chosen power of attorney. A power of attorney can be either a co-owner of the property, a blood- relative of the owner or any other person not related to that property or the owner.

There are two types of power of attorney that can be granted namely ‘General Power of Attorney’ wherein a property owner gives ‘general’ rights to his/her chosen attorney. These include but are not limited to sell, lease, sub-lease etc. the Property as the Power of Attorney deems fit. The other type is ‘Special Power of Attorney’ wherein only a ‘special’ or ‘specific’ right is given by the owner to his/her chosen Power of Attorney.

Yes, by executing a ‘Special Power of Attorney’ for this purpose, the property owner can transfer his/her right to register a property document to someone else.

The basic difference between a leasehold property and the freehold property is the ‘ownership’ of the Property. In a leasehold property, technically the ownership remains with the concerned Authority or the government (as the case maybe). But this does not bar the individual owner (known as Lessee in this case) from selling or dealing with the leasehold property as he/she may deem fit. In a leasehold property, the Lessee has to basically execute a tripartite sub- lease deed executed between the Lessee, the Purchaser and the Lessor (which is the concerned Authority or the government).

Whereas in a freehold property, the owner of the Property is the final owner of the Property and can sell/lease/mortgage the Property as he/she may deem fit.

The buyer needs to pay the following taxes at the time of registering the property:

• TDS or tax deduction at source on amount exceeding Rs 50 lakhs for the purchase of immovable property excluding agricultural land. The TDS must be submitted in the name of the seller.
• Stamp duty on registration
• Service Tax is applicable if the property is being purchased from the builder who conceived and constructed the project before offering possession to the buyer. If a ready-to-use property is purchased from the seller then service tax is not applicable.
• Value Added Tax (if applicable in the state)

• TDS- 1% on the amount exceeding Rs 5o lakhs
• Stamp duty depends on the state and municipal laws
• Service tax- 12.36% if the property is being developed by a builder/developer as a service for buyers.

A new section 194IA has been inserted in the Income-tax Act, 1961 by the Finance Act, 2013. It provides for tax deduction at source on transfer of certain immovable property other than agricultural land of Rs. 50 lakh or more. As per this new provision, any person, being a transferee responsible for paying to a resident transferor by way of consideration for transfer of immovable property other than agricultural land, shall at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, is required to deduct an amount equal to 1 percent of such sum as income-tax thereon specially when the value of the immovable property is Rs. 50 lakh or more.

In terms of calculating the cost on which TDS needs to be calculated, everything paid to the seller in consideration for property is considered i.e.

• Basic cost
• IDC, EDC, PLC
• Parking
• Fire-fighting equipment
• Electrification, wiring expenses etc.

Anything paid to the third parties or other authorities are excluded

• Stamp duty
• Registration fees
• Any payments to government authorities.
• Taxes charged by the builder

In case a ready property is being purchased from an end user, then everything paid to the seller in consideration for the property as per the agreement-to-sale is considered.

The income tax rules define gain in two broad categories; namely short term capital gain (STCG) and long term capital gain (LTCG). Any gains arising by selling a property after holding it for 3 or lesser number of years, is short term capital gain. Any gains arising by selling the property after holding it for more than 3 years comes under long term capital gain.

For short term capital gain, the capital gain from asset is added to the investor’s income and taxed as per the income tax slab they fall under.

For long term capital gain, tax liability is determined based on indexed cost of acquisition and improvement. Indexation is a concept, which factors inflation in its calculation by using a factor called cost inflation index (CII).

Possession certificate from the builder is what matters the most. Registration does not. The nature of the tax can be assessed based on the following two scenarios

During the under-construction phase

• When the buyers books the property rights by making an advance payment and makes subsequent payments to the developer as and when demanded and also with the progress in the construction then he gets the right to acquire a residential unit, and not a residential unit.
• The right is acquired by executing documents with the builder like allotment letter, or execution of builder-buyer agreement (whichever happens first).
• If the buyer has not obtained possession of the property, the right of the buyer would be in the nature of capital assets and accordingly, gain arising on such transfer would be in the nature of long term or short terms gain depending upon the period of holding. If more than 3 years, it is LTCG otherwise it is STCG.
• Section 54-F is applicable to exempt your capital gains from taxes i.e. entire sale proceeds net of expenses incurred to complete transfer would require to be reinvested to exempt capital gains from taxes.

After the possession of the property

• The unit becomes a residential house after the buyer obtains the possession from the developer. The nature of capital asset has changed – from rights to acquire to a residential house.
• Therefore, period prior to taking of possession is not to be considered.
• When you take possession of the flat which you have agreed to purchase, the right to purchase the flat gets converted into the flat itself. Therefore, if you sell the flat after taking possession, the period of three years begins/commences from the date of taking possession of the flat.
• Capital gains tax Long term or short term liability can accordingly be computed depending on period of holding of the right to own a flat or asset.

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.

Which instruments attract 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.

Yes. Stamp duty will have to be paid if the flat is gifted by the donor.