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Stamp
Duty and Registration procedures
A Flat purchaser has to enter
into an Agreement for Sale for the purchase of a flat. The said document duly
stamped and registered gives the flat purchaser right title and claim to the
flat purchased by him.
We have hereunder endeavored to
explain and elaborate e few legal matters that are relevant to the person
purchasing a flat.
Stamp Duty
Stamp duty is a pre-requisite
condition, which has to be paid before taking possession of the flat. It is
essential to pay the requisite stamp duty every time one purchases a new flat or
even when it is transferred within the family.
(i) Stamp Duty for
Flats
Present rates of stamp duty for residential premises in the city of Mumbai above
Rs.5,00,000/- is Rs.8750/- plus 5%
(ii) Stamp Duty
for Shops/ Galas/ Office Premises & Garage
The rate of Stamp Duty for Shops/Galas/Office Premises and Garage even if used
for car parking is 5% in Mumbai.
If the authorities are
demanding more stamp duty than the agreement value then a representation should
be made to the authorities emphasizing the below mentioned points (as may be
applicable)
1. Possession of the premises will be acquired at a later date. (10% reduction
in the market value is normally given by the town planners if possession is not
given to the purchaser at the time of execution of the agreement).
2. The duty has to be paid on Sq. Meter's built up area and not on super built
up area.
3. If payments have been made in say 1995 and the agreement has been executed in
1998 then the market value of the year 1995 has to be taken as per the
Principles Of Land Acquisition Act.
4. There are reductions in the market value if the size of the shop is big.
5. The area is lacking in infrastructural facilities.
6. There is a defect in the title of the property and therefore, market value
will also be reduced.
7. The officer should be told to inspect the premises and then only the market
value should be fixed.
(iii) Procedure
for Stamp Duty
When the Flat-Purchaser is desirous of entering into an Agreement, he/she is
been given the stamp duty amount which is calculated as per the Agreement Value
or Market Value whichever is higher. Once the stamp duty amount is been given to
the Flat-Purchasers they are been told to get the Pay-Order, which will be
addressed in favor of "SUPERINTENDENT OF STAMPS, MUMBAI". The
pay-order is given for franking of the agreement and later on the said agreement
is duly filled and signed by the respective parties.
Compulsory Registration Of Documents Section 17 of the Registration Act, 1908
This Act lays down different
categories of documents for which registration is compulsory. The documents
relating to the following transactions of immovable properties are required to
be compulsorily registered:
Under Section 2(6) of the
Registration Act, 1908 the term "immovable property" includes:
"land, buildings, hereditary allowances, rights to ways, lights, ferries,
fisheries or any other benefit to arise out of land, and things attached to the
earth, or permanently fastened to any thing which is attached to the earth, but
not standing timber, growing crops nor grass."
1. Instruments of gift of immovable property.
2. Lease of immovable property from year to year or for any term exceeding one
year or reserving a yearly rent.
3. Instruments which create or extinguish any right or title to or in an
immovable property of a value of more than one hundred rupees.
Place for Presenting document
for registration Section 28 of the Registration Act, 1908 states that all
documents of which registration is compulsory if it relates to an immovable
property as well as a few documents of which registration is optional should
normally be presented for registration in the office of the Sub-Registrar within
whose sub-district the whole or some portion of the property to which the
document relates is situated.
(i) Registration
Procedure
At the time of lodging a document for registration For registration of any
instrument, the original document which should be printed on one side only along
with two photocopies of the original have to be submitted to the Registering
Officer. The copies are to be photocopied only on one side of the paper and
there has to be a butter paper between the two photocopied papers. The
registration procedure also requires the presence of two witnesses and the
payment of the appropriate registration fees.
(ii) On Completion of
Procedure
A receipt bearing a distinct serial number is issued. The following
requirements for completing the registration are usually stated on the receipt:
1. Market Value of the property;
2. Income-tax clearance; i.e., N.O.C. under Section 269 UL (3) issued by the
Appropriate Authority constituted under Chapter XX-C of the Income Tax Act, 1961
if the same is applicable;
3. Urban Land Ceiling declarations of the transferor/s and the transferee/s.
Fees for registration of a document The State Government has been empowered to
fix the fees for registration of the document.
(iii) Registration Fee
The registration fee at present fixed for registering documents relating to
property transactions are approximately 1% of the market value or agreement
value whichever is higher subject to Maximum of Rs.30,000/- [from 1-4-2003]. The
registration fee for the following immovable property transactions is leviable
on the market value of property on which stamp duty is charged:
1. Conveyance,
2. Exchange,
3. Gift,
4. Partition,
5. Transfer of Lease by way of Assignment,
6. Sale,
7. Power of Attorney given for consideration,
8. Authorization to the attorney to sell the property.
(iv) Person's Entitled
To present the document to the Registering Officer for Registration Section
32 of the Registration Act, 1908 deals with the provisions relating to the
presenting of documents for registration by a person. Subject to certain
exceptions, every document, which is to be registered under the provisions of
the Act, should be presented at the proper registration office by:
1. The concerned person himself/herself, or
2. The representative or the agent of such a person duly authorized by a power
of attorney duly authenticated in a manner as is stated in Section 33 of the
Registration Act, 1908. Registration of a document compulsory under the
provisions of The Maharashtra Ownership Flat Act, 1963 Registration is necessary
under the provisions of this Act.
Section 4 (1) of THE MAHARASHTRA OWNERSHIP
FLATS (Regulation of the promotion of construction, sale, management and
transfer) ACT, 1963, it is laid down that, the agreement in respect of flats
to be sold by the owner/ promoter/developer to the flat purchaser requires
compulsorily to be registered under The Registration Act.
Under the provisions of THE MAHARASHTRA
APARTMENTS' OWNERSHIP ACT, 1970 Registration is necessary under this Act.
Under Section 13 of the aforesaid Act, it is necessary on the part of the
owner/owners to execute a declaration with regard to description of the land on
which the building and improvements are to be located, including the number of
storeys, basements, number of each apartment, area of each apartment, number of
rooms and immediate common area etc. along with a set of floor plans of the
building showing the layout, location, and dimensions of the appurtenance and
bearing the verified statement of an architect certifying that the same is an
accurate copy of the floor plans of the building as filed with and approved by
the local authority within whose jurisdiction the building is located. Section
13(3) of the said Act requires that in all registration offices a book called
"Register of Declarations" and "Deed of Apartments" under
The Maharashtra Apartment Ownership Act, 1970 and a relevant index, be in a
particular form and should contain such particulars as the State Government may
prescribe. Under Section 13(5) of the said Act, the Sub-Registrar or Registrar
must register the declaration along with floor plans of the building and the
Deed of Apartments in the Register of Declarations and Deed of Apartments under
the said Act and shall also enter the particulars prescribed in the index kept
under sub-section(3).
Necessity of registering a document if a person agrees to transfer his right,
title or interest in a premises purchased from an owner / promoter / developer
to another person before the society is formed It is advisable to get an
agreement registered in these circumstances.
Necessity of Registration of an agreement to transfer a flat after the
registration of a co-operative society After the registration of a co-operative
society the purchasers of various premises become members and shareholders of
such a society, and as such the members are thereby governed under the
provisions of The Maharashtra Co operative SocietiesAct,1960.
(v) Consequences of
Non-Registration of a document
According to Section 49(c) of the Act, if a document, of which registration is
compulsory under Section 17 of Registration Act, has not been registered, it
cannot be produced as evidence in a court of law.
(vi) Time
Time permitted for registration of a document Under Section 23 of the Act,
subject to certain exceptions, any document other than a will has to be
presented for registration within four months from the date of its execution.
(vii) Expiry of the
prescribed time
If a document is not presented for registration within the prescribed time
period of four months, and if in such a case the delay in presentation of the
document does not exceed a subsequent period of four months, then the parties to
the agreement can apply to the Registrar, who may direct that on payment of a
fine not exceeding ten times the proper registration fees, such a document
should be admitted for registration. Delay in Registration - provision for
additional four months The practice followed in such an event is that the
parties to the document execute a Deed of Confirmation confirming that the main
deed is valid and binding upon them. By way of such a deed the transferor/s also
confirm/s that he/they hold/s no right, title and interest in the property and
the same is being transferred to the transferee/s. A copy of the main deed is
annexed to this Deed of Confirmation. This is the only manner in which the lapse
in registration can be rectified.
Deed of Cancellation
Deed of Cancellation, of a duly
executed and registered document by mutual consent may arise in some
circumstances. In that event, the Deed of Cancellation will also have to be
registered. At the same time no document can be canceled unless all the parties
to it have mutually agreed to the cancellation.
Deed of Redtification
Deed of Rectification, if the
main document/agreement is registered, then in that event it is always necessary
to register the Deed of Rectification too. Blanks, erasures or alterations in a
document. They are permissible as per Section 20(1) of the Act, but the persons
executing the document should attest with their signatures or initials such
blanks, erasures or alterations. As per Section 20(2), while registering such a
document, it is the duty of the Registering Officer to make a note of any such
blank, erasure or alteration in the register.
The Procedure on admitting a document to registration
The Registering officer has to
endorse the following particulars, namely:
1. The signature and admission of every person admitting the execution of the
document in person or by his representative, assign or agent;
2. The signature and admission of every person examined in reference to such a
document;
3. Any payment of money or delivery of goods made in the presence of the
Registering Officer in reference to the execution of the document and any
admission or receipt of consideration made in his presence in reference to such
execution.
After completion of all
formalities related to registration, such original documents are returned by
post or by hand delivery only after the proper procedure for the preservation of
the original document has been completed by the Registration Authorities.
Unclaimed documents
Section 85 of the Registration
Act, 1908 states that all documents (other than Wills) remaining unclaimed in
any registration office for a period exceeding two years may be destroyed.
Execution of documents of outside India
A document relating to an
immovable property can be executed out of India and later it can be presented
for registration in India. As per Section 26 of The Registration Act, 1908 if a
document purporting to have been executed by all or any of the parties out of
India is presented for registration within the prescribed time, the Registering
Officer may, on payment of proper registration fee, accept such document for
registration if he is satisfied that:
1. The instrument was executed out of India.
2. The instrument has been presented for registration within four months after
its arrival in India.
Power of Attorney
A Power of Attorney is a
document which empowers a specific person to act on behalf of the person who is
executing the same. It also includes any document by which a person is
authorized to appear and act on behalf of a person who is executing the power of
attorney. A power of attorney may also be given by a person to another to appear
before any Court, Tribunal or Authority or before a Co-operative Society or any
Body or Association. Types of Power of Attorney There are two types of Power of
Attorney, namely:
1. General Power of Attorney
This type of a Power of Attorney gives general powers to the person in whose
favor the document is executed. The person who is given the powers is called a
"Constituted Attorney" and he is authorized to perform all kinds of
acts and to execute any document on behalf of the person who has so executed
that document.
2. Special Power of
Attorney
Such a Power of Attorney gives the person, power/s only for specified act/s or
transactions. In this case the power has to be strictly adhered to and the
Constituted Attorney cannot do anything for which he is not duly empowered by
the Power of Attorney.
Necessity of a power of Attorney
It is generally executed when a
person wants to authorize someone to carry out any activity pertaining to his
property, which he would have undertaken if he would be personally capable of
doing the same. It is an authorization, which confers powers akin to that of the
Principal on the person for a temporary period of time. If a person wants to
present a document for registration at the proper registration office and if,
for some reason he cannot be present, he may do so through his representative
who is duly authorized by a Power of Attorney, which is executed and
authenticated in the prescribed manner.
Execution of a Power of Attorney
If the principal at the time of
its execution does not reside in India As per Section 33(c) of the Registration
Act, 1908, if the principal, at the time of executing the Power of Attorney does
not resides in India, then the Power of Attorney has to be executed before and
authenticated by a Notary Public, or any Court, Judge, Magistrate, Indian Consul
or Vice-Consul, or a representative of the Central Government in the country
where the principal resides.
Attestation of a Power of Attorney
by a Registrar
The Registrar or the
Sub-Registrar or the Magistrate, must first satisfy himself that the Principal
has voluntarily executed the Power of Attorney. Only after he is satisfied as
regards the same, can he attest a Power of Attorney. If he is not satisfied as
to the genuineness of the Power of Attorney, then he has the authority to get
evidence as to the voluntary nature of the execution.
Persons who are exempted from
being present at any Registration Office for the Purpose of Admitting any
Document
As per Section 38 of the
Registration Act, 1908, the following persons are exempted from attending the
office of the Registrar for admitting any document:
1. Persons, who are physically incapacitated due to some infirmity and who will
have to take too much of a risk or serious inconvenience in order to be present.
2. Persons who are in jail under civil or criminal process.
3. Persons who are exempt by law from making personal appearance in Court
Here we are offering some vital
information for the NRIs. The following point and the preceding FAQ's shall be
of vital.
- Non-resident Indians holding
Indian passport do not require any permission from RBI for acquiring
Immovable Property for bonafide residential purposes as section 31 of FERA
1973 is not applicable to them.
- Non-resident Indians holding
Indian passport may pay the purchase consideration either by remittance of
funds from abroad through normal banking channels or out of NRO Account or
out of NRE Account or out of FCNR Account.
- RBI has granted General
Permission to Non-resident Indians holding Foreign Passport (i.e. Foreign
Citizens of Indian Origin) to acquire, hold, transfer or dispose off by way
of sale or inheritance immovable properties situated in India provided :
- The property is for the
Purchaser's bonafide residential purpose.
- The purchase
consideration is met either by remittance of funds from abroad through
normal banking channels or out of NRE/FCNR Account or out of FCNR
Special Deposit Account.
- Foreign citizens of Indian
origin are however required to declare the properties to RBI within a period
of 90 days from the date of purchase in Form IPI 17. The following documents
must be submitted along with the declaration.
- A certified copy of the
purchase deed or a certificate from the Co-operative Housing Society or
an Association of the apartment owners as an evidence of transfer /
registration of the property in the declarant's name.
- Certificate from the
declarant's bankers in India evidencing receipt of inward remittance(s)
in foreign exchange through normal banking channel or withdrawal of
funds from the declarant's NRE/FCNR account/ FCNR Special Deposit
Account and payment of consideration for the property out of those
funds.
- Where a Foreign Citizen of
Indian origin wishes to acquire a property, out of funds held in NRO Account
then the permission from RBI will be required which can be applied for in
Form IPI 1.
- Where a Foreign Citizen of
Indian origin wishes to acquire a property from the sale proceeds of another
property, prior permission of RBI is essential and may be obtained by
applying in Form IPI 1.
- Any number of properties can
be acquired by non-resident Indians regardless of whether they are holding
Indian passport provided they are required for bonafide residential
purposes.
Under Section 29 of the Foreign Exchange Regulation Act 1973, the Reserve
Bank of India has granted General Permission to Foreign Citizens of Indian
origin and Indian citizens residing outside India to let out their immovable
properties (Commercial / Residential).
The rental income or proceeds of any investments out of such income shall be
repatriable outside India subject to Income tax being paid.
The Reserve Bank of India on an application in Form IPI I may consider
favourably the acquisition of residential property by Foreign Nationals of
Non-Indian origin provided:
1. The purchase consideration is met out of funds remitted from abroad.
2. The property is acquired for bonafide residential use.
3. The foreign National of Non-Indian origin undertakes not to repatriate
the sale proceeds.
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