Q:  What is the difference between built up area, super built up area, and carpet area?
A:  Carpet Area:This is the area of the apartment/building which does not include the area of the walls.

Q:  What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement ?
A:  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.
Q:  Who is the appropriate authority for knowing the market value of the property ?

A:  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.

Q:  What are the risks associated in buying a flat on Power Of Attorney (POA) basis ?
A:  Purchasing a flat on a POA basis is not permitted under the law of the land.

Q:  Is a POA revocable ?
A:  Yes, a POA can be either revocable or irrevocable, depending on what sort of a POA one has made.
Q:  What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any ?
A:  A freehold 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 lessor / lessee involved.
Q:  How to convert a POA flat into a Free Hold one ?
A:  POA cannot be converted into anything. Leasehold properties of DDA in Delhi can be converted to freehold, as per provisions.

Q:  What is a Sale Deed?

A:  Sale Deed also known as conveyance deed, is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

Q:  What is a Draft Sale Deed?

A:  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 khata, 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.
Q:  What is Khata?

A:  A Khata is an account of assessment of a property, recording details about your 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.
Q:  What is the difference between a Khata and a Title Deed?

A:  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.
Q:  What should a purchaser keep in mind while purchasing a residential flat?
A:   Some of the factors a purchaser must keep in mind while purchasing a residential flat are:
Q:  How can knowing the Carpet Area, Built-Up Area & Super Built-Up Area of a flat help me in purchasing a flat?

A:  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.
Q:  Should I inspect a property before buying it?

A:  Yes. Buying a home or an office is probably the largest single investment you will ever make. You should learn as much as you can about the condition of the property and the need for any major repairs before you buy, so that you can minimize unpleasant surprises and difficulties at a later stage. 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.
Q:  Which are the instruments that attract the payment of Stamp Duty ?
A:  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
Q:  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 genuineness of the builder ?
A:  When you are buying a flat 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& 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.

Q:  Are there any formalities to be completed or forms to be filed on execution of the Sale Deed or document of transfer?
A:  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.
Q:  How is my loan eligibility determined?
A:  The primary concern of the HFC's in determining the loan eligibility is that you are comfortably able to repay the amount you borrow. Your repayment capacity is determined by taking into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history
Q:  What are Collateral Securities taken by the Housing Finance Companies?
A:  HFCs usually take some additional securities which are called collateral securities. These may be in the form of guarantee from one or two persons, assignment of life insurance policies, deposit of shares, and units or other securities. These additional securities are taken with the hope that if a loan is not paid back recourse may be taken to such securities instead of depending upon the mortgage of the property which is the last resort. Guarantors, when alerted, become very effective persons in prevailing upon the borrowers to fulfil their obligations.
Q:  What are the fees and charges payable and when are they payable?
A:  Home loans are usually accompanied by the following extra costs:
Q:  What is the maximum amount which I can borrow?

A:  Home loans are generally provided for in the range of 75%-85% of the asset value.The amount of loan varies from institution to institution and it may vary from Rs.1 lakh to Rs.1 crore.
Q:  What are the types of home loans available?

A:  There are a variety of home loans available: a. Home Purchase Loans b. Existing Home Improvement Loans c. Home Construction Loans d. Home Extension Loans e. Home Conversion Loans f. Land Purchase Loans g. Bridge Loans h. Balance Transfer Loans i. Refinance Loans j. Stamp Duty Loans k. Loans to NRIs a. Home Purchase Loans:This is the basic home loan for the purchase of a new home. b. Home Improvement Loans: These loans are given for implementing repair works and renovations in a home that has already been purchased by you. c. Home Construction Loans:This loan is available for the construction of a new home. d. Home Extension Loans: This is given for expanding or extending an existing home. For example addition of an extra room etc. e. Home Conversion Loans: This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through a home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need for pre-payment of the previous loan. f. Land Purchase Loans : This loan is available for purchase of land for both home construction or investment purposes g. Bridge Loans: Bridge Loans are designed for people who wish to sell the existing home and purchase another. The bridge loans helps finance the new home, until a buyer is found for the old home. h. Balance Transfer Loans: Balance transfer loans help you to pay off an existing home loan and avail the option of a loan with a lower rate of interest. i. Refinance Loans: This loan helps you pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present home. j. Stamp Duty Loans: This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property. k. Loans to NRIs:This is tailored for the requirements of NRIs who wish to build or buy a home in India. EMI is the Equated Monthly Installment payable till the loan is paid back in full. It consists of a portion of the interest as well as the principal. Some of the incentives offered by lending institutions are Some companies sanction the loan without requiring you to identify property as a pre-requisite for eligibility.

Q:  Does the property have to be insured?
A:  You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by the HFC during the period of the loan and will have to produce evidence each year and/or whenever required by the HFC. The HFC will be the beneficiary of the insurance policy. This is an added cost that will add to the final cost of purchase of the property.
Q:  What is the difference between a Monthly Reducing EMI and a Yearly Reducing EMI?
A:  Yearly Reducing EMI-In this system of calculating EMI the principle is reduced at the end of the year,thus you continue to pay interest on a certain p ortion of the principle which you have actually paid back to the lender Thus the EMI for the monthly reducing system is effectively lesser than the Yearly redu cing system of calculating the Interest
Q:  Who is a Person of Indian Origin?
A:  A person of Indian origin is 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 Indian passport; - Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

Q:  Is NRI/PIO who has purchased residential/commercial property under general permission required to file any documents with Reserve Bank of India?

A:  NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank.
Q:  Is there any restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available?

A:  There is no restriction on number of residential/commercial properties that NRI/PIO can purchase under the general permission available.
Q:  Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident in India?

A:  Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999.
Q:  Under general permission available to whom can NRI transfer by way of sale his residential/commercial property?

A:  NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO.
Q:  Under general permission available to whom can NRI/PIO transfer by way of sale his agricultural land/plantation property/farm house in India?
A:  Under the general permission available NRI/PIO may transfer by way of sale his agricultural land/plantation property/farm house in India to a person resident in India who is a citizen of India.
Q:  Who is liable to pay Stamp Duty - the buyer or the seller ?
A:  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.

Q:  Who is the appropriate authority for knowing the market value of the property?
A:  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.

Q:  How does one determine the market rent ?

A:  There is no prescribed manner but it can be easily found out by approaching such people as the brokers, registration authority, and appropriate authorities etc.
Q:  In case a tenant is not protected by the Rent Act, what is the procedure to ask him to vacate and what is the notice period required to be given ?

A:  Normal procedure is to send a notice to the tenant, failing which a court case may be filed which usually takes 10 to 20 years to reach a verdict.

Q:  When is a sale of immovable property concluded?

A:  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.
Q:  Is it compulsory to register documents for the sale of property?

A:  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.

Q:  Does one have to pay any amount for registration of the sale/transfer documents?
A:  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.
Q:  How do I make an application?

A:  You need to approach a Housing Finance Company with the latest salary slips and TDS form 16 of the last to financial years of yourself and your co-applicant, if any. The loan officer after going through the details of the documents will informally tell you the loan amount you are eligible for and the terms of the same. You need to submit the application form along with the necessary documents. On receipt of the application form, the HFC reviews it, asks questions wherever necessary and convey its decision to the applicant. You are advised to visit more than one company since you are likely to get better terms/ larger loan amount if you shop for the best deal

Q:  What are the repayment period options?

A:  Repayment period options range generally from 5 to 15 years. A few HFC's also offer a 20-year repayment period, usually at a higher interest rate. As a non-resident, you can avail of a loan only for a maximum period of 7 years.

Q:  What is the range of interest rates offered?

A:  The interest rates may vary from institutions to institutions and generally range from about 12.5% to around 16%. 12.

Q:  How is the interest calculated on my loan?

A:  Most HFCs follow the yearly reducing-balance method, which accounts for your principal repayments only at the end of their financial year. Thus, you pay interest on the principal that you have already returned to the HFC. The effective interest rate is thus higher than the quoted interest rate by around 0.7%. Banks and some HFCs, in contrast, follow the daily or monthly reducing-balance method, which results in a lower interest burden

Q:  What is the basis of interest rates calculation?

A:  The interest on home loans in India is usually calculated either on monthly reducing or yearly reducing balance.

Q:  What is the fixed rate of interest?

A:  Some HFC's have fixed rate of interest which means that the interest rates remain unchanged for the entire duration the loan. This basically means that you do not benefit, even if the rates of interest drop in the market.

Q:  What is a floating rate of interest?

A:  This is the rate of interest that fluctuates according to the market lending rate.

Q:  Can one take a home loan for construction in a city while working in another city?

A:  Yes, you can take loan for construction in one city while working in another city. The HFC's generally service this loan after getting details of the plot legally verified.

Q:  How much time does it take to get an application processed and the loan getting sanctioned?

A:  It takes around fifteen days for processing of one's application if the documentd are in order.It takes another week for the company to check out the property papers and make the disbursement

Q:  How is the maximum amount derived?

A:  The maximum amount which one can borrow is a function of many factors which includes primarily the purpose of the loan. In addition, ones residential status whether resident in India or non-resident will also have a bearing on the maximum amount of loan that one can borrow. Generally, if one is a resident Indian, then he can borrow upto 85% of the cost of the property

Q:  What security do I have to provide for the loan I want to take?

A:  Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds. The title should be clear and marketable. Some HFCs may also require collateral security like the assignment of life insurance policies, pledge of shares, NSCs, units of mutual funds, bank deposits or other investments

Q:  What are the documents required at the time of application?

A:  The common documents that the financiers require at the pre-approval stage are: Proof of Age

Q:  Who can be a Co-Applicant?

A:   Co-Applicants are the Co-Owners of the property in respect of whom the financial assistance has been sought. Usually joint applications are from : husband-wife, father-son or mother-son.

Q:  What is the EMI?

A:  EMI or Equated Monthly Installments, refers to the fixed sum of money that you will be paying to the housing finance company every month. The EMI comprises both interest and principal repayment. The size of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.

Q:  Can I repay my loan ahead of schedule?

A:  Yes, you can pay your loan ahead of schedule. However, it must be noted that housing finance companies charge a fee for early redemption of loan. This fee can vary between 1-2% of the loan amount being prepaid.

Q:  What are the tax benefits available?

A:   Tax benefits available are as under : (a) Exemption under Sec 88 of IT Act (Rebate) for repayment of principal upto Rs.10,000/-. (b) Deduction under Sec 24 of IT Act for interest payment on housing loans upto Rs. 75,000/- (in respect of self-occupied house property acquired or constructed with capital borrowed on or after 1.4.99, and acquisition or construction whereof is completed before 1.4.2001. Tax benefits vary in case of rental.

Q:  Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?

A:  No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse.
Q:  Where can permission be taken for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals of Indian origin?

A:  All requests for acquisition of agricultural land/plantation property / farmhouse by any person resident outside India or foreign nationals may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.

Q:  Do non-resident Indian citizen require permission of Reserve Bank to acquire residential/ commercial property in India?
A:  No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/ plantation property or a farmhouse
Q:  Where can one find regulations/directions issued by Reserve Bank for acquisition and transfer of immovable property in India by a person resident outside India?

A:  Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India have been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000 as amended vide Notification No. FEMA 64/2002-RB dated June 29, 2002 and Notification No. FEMA 65/2002-RB dated June 29, 2002 and relevant directions issued in the form of A.P. (DIR Series) Circulars.

Q:  Under the extant foreign exchange regulations to whom is general permission available for purchase immovable property in India?

A:  General Permission is available to purchase only a residential/commercial property in India to a person resident outside India who is a citizen of India (NRI) or who is a Person of Indian Origin (PIO).

Q:  Can a name of a foreign national of non-Indian origin be added as a second holder to a residential/commercial property purchased by NRI/PIO?

A:  No.

Q:  Can a foreign national of non-Indian origin resident outside India acquire any immovable property in India by way of purchase?
A:  No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer’ includes among others, ‘purchase’. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of purchase.
Q:  Can a foreign national of non-Indian origin acquire residential property on a lease in India?
A:  Yes. A Foreign National of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of Reserve Bank of India.
Q:  Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of purchase?

A:   No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.
Q:  Can NRI/PIO acquire residential/commercial property by way of gift under the general permission available?

A:  Yes. Under general permission available NRI/PIO may acquire residential/commercial property by way of gift from a person resident in India or a NRI or a PIO.

Q:  Can a person resident outside India (i.e. a NRI or a PIO or a foreign national of non-Indian origin) acquire agricultural land/plantation property/farm house in India by way of gift?
A:   No. A person resident outside India cannot acquire agricultural land/plantation property/farm house in India by way of gift.
Q:  Can a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) hold any immovable property in India acquired by way of inheritance from a person resident outside India?

A:  With the specific approval of Reserve Bank a person resident outside India may hold any immovable property in India acquired by way of inheritance from a person resident outside India, provided the bequeathor had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations
Q:  Under general permission available to whom can a PIO transfer his residential/commercial property by way of sale?

A:  PIO can transfer by way of sale residential/commercial property in India only to a person resident in India.

Q:  Can a PIO transfer by way of sale his residential/commercial property to a NRI or a PIO?

A:  No. He would need to seek Reserve Bank prior approval for transfer by way of sale residential/commercial property in India to a NRI or a PIO.

Q:  Can a foreign national of non-Indian origin whether resident in India or outside India transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India?

A:  No. A foreign national of non-Indian origin whether resident in India or outside India would need to seek prior approval of Reserve Bank for transfer by way of sale residential/property in India acquired with the specific permission of Reserve Bank to a person resident in India or outside India.

Q:  Can a foreign national of non-Indian origin resident outside India transfer by way of sale agricultural land/plantation property/farm house acquired by him in India?

A:   A foreign national of non-Indian origin resident outside India would need to seek prior approval of Reserve Bank for transfer, by way of sale, agricultural land/plantation property/farm house acquired in India.
Q:  Is it necessary to obtain any permission, from the Income Tax authorities if I want to purchase any immovable property ?
A:  There is restriction on transfer of immovable property under Section 269UC of the Income Tax act.
Q:  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 ?
A:  Under Section 88 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.
Q:  Whether the benefits attached to a residential property are also available to a commercial property ?

A:  No such benefits are not available for commercial Properties.
Q:  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 ?
A:  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.
Q:  What are the tax implications of sale of any house property, commercial or residential ?
A:  You are liable to pay Tax on profit arising from sale of a house property under the head Capital Gain
Q:  Whether incidental charges like brokerage, registration fees, stamp duty and other charges arising out of sale of house property deductable from profit arising on sale ?

A:  These expenses are allowable expenses from the full value of consideration of the sale of house property.