The implementation of RERA and GST has proved to be a boon for the real estate industry in India. As a result of these revolutionary moves, the real estate sales in India has witnessed an upward trend and is all set to keep growing in the future as well. Once you have zeroed in on investing in homes in India, there are a few guidelines you should know for a hassle-free buying experience.
Consequent to the introduction of Foreign Exchange Management Act (FEMA), 1999 the Reserve Bank of India has made the following regulation called as the Foreign Exchange Management (Acquisition & Transfer of Immovable Property in India) Regulation with effect from June 1, 2000.
The current position is therefore as under:
In the event of sale of immovable property other than agricultural land/ farm house/ plantation property in India by the above two categories of persons repatriation of sale proceeds is possible subject to the following conditions:-
In case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account. NRI/PIO are also allowed to repatriate an amount up to USD 1 million per financial year out of the balance in the NRO account / sale proceeds of assets by way of purchase / the assets in India acquired by him by way of inheritance / legacy. This is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and a tax clearance / no objection certificate from the Income Tax Authority for the remittance. Remittances exceeding US $ 1,000,000 (US Dollar One million only) in any financial year requires prior permission of the Reserve Bank.
Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong can take immovable property in India by way of lease for a period not exceeding 5 years without permission from RBI. For all other types of acquisition or transfer of immovable property in India they need to take prior permission of RBI.
Summary of acquisition and transfer of immovable property in India:
|Indian Nationals Residing In India||Indian Nationals Residing Outside India||Persons of Indian Origin Residing Outside India|
|No restrictions||Can acquire any immovable property other than agricultural land / plantation / farm house.||Can acquire any immovable property other than agricultural land / plantation / farm house out of foreign currency funds or by way of gift from person residing in India or from a person residing outside India who is either a citizen of India or a Person of Indian origin or by way of inheritance from person residing outside India provided that person had acquired the property in accordance with the provisions of the Foreign Exchange Law in force at the time of acquisition or from a person residing in India|
|Can acquire any immovable property other than agricultural land / plantation / farm house.||Can sell any immovable property other than agricultural land / Plantation / farm house to a person residing in India.|
|Can acquire any immovable property other than agricultural land / plantation / farm house.||Can gift residential or commercial property to a person Residing in India or to person resident outside India who is a citizen of India or PIO|
|Can sell / gift any agricultural land / plantation / farm house to an Indian citizen residing in India.|
|Foreign Citizens Residing in India||Foreign Citizens Residents Outside India||Indian Branch/ Office of Foreign Concern|
|No restrictions, except in case of Nationals of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal , Bhutan, Macau or Hong Kong who will require prior permission from RBI in all cases except where the immovable property is acquired by way of lease for less than 5 years.||Can acquire only after prior permission from RBI.||Can acquire immovable property which is required for carrying on its activities, a declaration in From IPI will have to be filed with RBI within 90 days of such acquisition (the above procedure is not applicable to a liaison office)|
A citizen of India who stays abroad for employment or for carrying out any business for an uncertain period of time is considered as a non-resident. People who are posted in U.N. organizations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also considered as non-residents. Non-resident foreign citizens of Indian Origin are treated on par with NRI's and are offered the same facilities.
The definition of ‘Person of Indian Origin’ is defined under section 2 (b) of Foreign Exchange Management (borrowing and lending in rupees) Regulations, 2000 and under section 2 (xii) of Foreign Exchange Management (Deposit) Regulations, 2000 as given under:- “Person of Indian Origin’ means a citizen of any country other than Bangladesh or Pakistan, if He at any time held an Indian passport; or He or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or The person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b)” Person of Indian Origin (PIO) for the purpose of acquiring immovable property in India as given under:- “Person of Indian origin’ means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who At any time, held an Indian passport; or Who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)”
OCB (Overseas Corporate Bodies) are the bodies that are mainly owned by the individuals of Indian nationality or origin resident outside India. OCB includes all the overseas companies, trusts, partnership firms, societies and corporate bodies which are indirectly or directly owed by at least 60% of individuals of Indian nationality or origin resident outside India. However, the ownership interest should be actually held by them and not by the nominees.
Various facilities offered to the NRI's are as follows:
NRI's are not required to take any permission of RBI while acquiring any residential and commercial property in India
Reserve Bank of India has given permission to the foreign citizens of Indian origin to purchase immovable property in India for their residential use. Hence, they do not need to acquire any permission.
While purchasing a residential immovable property in India, the foreign citizens of Indian origin are required to file a declaration in form IPI 7 with Central Office of Reserve Bank at Mumbai within 90 days from the date of purchase of that immovable property.
They can also submit a final payment of purchase consideration along with a certified copy of document which is an evidence of transaction and the bank certificate of the consideration paid.
Reserve Bank of India has given permission to foreign citizens of Indian origin to sale a property. However, wherever the property is purchased by them, the funds towards the purchase consideration should be either remitted to India or the paid out of balances in NRE/FCNR accounts.
Reserve Bank of India has given permission to foreign citizens of Indian origin to acquire or dispose of a residential property by way of gift from or to any relative who is a citizen of India or a person of Indian origin (in case he is not the citizen of India) subject to compliance with applicable tax laws.
Reserve Bank of India has given permission to foreign citizens to acquire commercial properties in India other than agricultural land/farmhouse/ plantation property.
Reserve Bank of India has given permission to rent out any immovable residential/commercial property in India. However, the rental income or proceeds of any investment of such income are eligible for repatriation.
Reserve Bank of India has given permission to the Indian companies or firms to grant housing loans to the NRI's. However, there are certain terms and conditions that are needed to be met.
According to the Maharashtra Stamp Act, 1958, stamp duty shall be paid vide impressed stamps or adhesive stamps. Hence the stamp duty on any instrument (including an electronic document) may be paid via adhesive stamps, non-judicial stamp paper, franking machines, labels being affixed and impressed by proper officer or receipt of e-payment of the stamp duty.
In Maharashtra, the Maharashtra Stamp Act, 1958 is applicable to all the documents executed or brought in the state for the purpose of chargeability of the stamp duties. All the instruments chargeable with duty and executed by any person in this state are required to be stamped before or at the time of execution or immediately thereafter or on the next working day following the day of execution.
It is compulsory to pay the stamp duty within three months from the date of receipt in India. You will be required to produce the document before the District Registrar and he will certify the payment.
Note the document on a plain paper or a Rs.2. Document Sheet. You can pay the stamp duty at any authorized bank or at the jurisdictional Sub-Registrar Office.
Various varieties of housing loans are offered by different financial institutions. Prominent among these are:
Any Indian citizen, including Non Resident Indians, with a steady source of income can borrow funds for financing the cost of a flat from housing finance companies and banks.
Yes, depending upon the eligibility criteria and policy of the bank.
Loans are generally disbursed between 70%-80% of the cost of the flat. The balance money is to be funded by the flat purchaser from his own contribution. The percentage of loan would vary from bank to bank.
All projects at Runwal are preapproved for the grant of home loans by leading housing finance companies and banks. The Runwal sales team liaises with the all leading Banks & Housing Finance Institutions for project approvals, processing the loan, documentation and disbursement of loans.
Equated Monthly Installment ("EMI") is the amount comprising a portion of the interest and the principal loan amount, which is payable by a borrower to the lender every month.
Interest rates vary from time to time and from institution to institution. The interest is calculated either on a daily or monthly reducing or yearly reducing balances.
A fixed-rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.
A floating interest rate loan is a loan where the interest rate payable is linked to the bank's internal prime lending rate (PLR) such as the base rate which rises and falls as per banks policy.
Repayment period options range generally from 5 to 20 years. Some of the banks may give loans up to 25 years also.
The flat purchased is the primary security and is mortgaged to the lending institution till the entire loan is repaid. Additional security such as life insurance policies, shares, bonds, fixed deposit receipts, national savings certificates can also be offered, as per the requirements of the institution.
Yes. Many lending companies require 1 guarantor or a co-applicant.
Varies from bank to bank but usually it is 15 - 20 days for a salaried person and 20 - 30 days for a self employed person depending on the applicant's documents.
Usually loans are disbursed within 10 - 15 days after completion of verification by the institution, documentation (original agreement for sale / lodging receipt) and completion of all relevant procedures. Submission of proof that the borrower's own contribution has been paid by him to the vendor / builder / developer is also an important aspect.
Yes, but this policy varies from bank to bank.
What are the documents required at the time of applying for a housing loan?
Purchasing a home on a loan is a lot more than pure happiness, you enjoy multiple tax benefits with it too! These benefits and exemptions not only help you save tax, but they also help in managing smooth cash flows.
Here are the deductions that income tax authorities offer to individuals who have taken a housing loan from specified financial institutions:
Under Section 24 of the Income Tax Act
The interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. Rs 2, 00,000 is the maximum amount eligible for deduction.
Under Section 80C of the Income Tax Act
You can get a maximum Rs.1, 50,000 deduction from the Income, on repayment of principal during a financial year. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assesse is also considered under this amount. All these deductions should not exceed the overall limit of Rs. 1 lakh. However, deduction under Section 80C is not available in respect of payments made towards the cost of any addition, alteration, renovation or repair carried out after the issue of the completion certificate.
The plans, specifications, images and other details herein are only indicative and subject to approval of the concerned authorities. The Group / Owner reserves the right to change any or all of these in the interest of the development, without prior notice or obligation. Artist’s impressions are used to illustrate amenities, specifications, images and other details and these may be applicable to select apartments only. Tolerance of +/- 3% is possible in the unit areas on account of design and construction variances. All brands stated are subject to final decision of the project architect. This printed material does not constitute an offer and/or contract of any type between the Group / Owner and the recipient. No booking or allotment shall be deemed to have been made on the basis of this printed material. Any Purchaser / Lessee of this development shall be governed by the terms and conditions of the agreement for sale / lease entered into between the parties, and no details mentioned in this printed material shall in any way govern such transactions unless as may be otherwise expressly provided in the agreement for sale/lease by the Group / Owner. The Group / Owner does not warrant or assume any liability or responsibility for the accuracy or completeness of any information contained herein.