Saturday, September 27, 2014

Crucial Property Documents

 

Crucial Property Documents



Here are some key steps to be followed while purchasing property

 

A buyer and seller have to execute an 'agreement to sell' once the contract to buy or sell property has been finalised. The agreement will contain the main terms and conditions for sale of the property, along with details of the property and parties involved. Further, it will also contain information on payment terms, transfer fee, stamp duty and registration fee.


The transfer fee may either be payable by the seller or buyer, or may be shared equally by the two as mentioned in the agreement. It is not mandatory to register an agreement to sell.

Sale deed

Once the parties are ready to go ahead, a sale deed is executed. This document transfers ownership of the property in favour of the buyer. The deed contains details of the property, buyer, and seller. It may also capture the entire chain of past ownerships and their modes of transfer.

This is the most important document. Efforts must be made to ensure that there are no mistakes in this document.

Registration

A sale deed has to be necessarily registered at the Office of the Registrar. According to the Registration Act, one needs to register the documents at the time of purchase of property.


The Act specifies the documents that are to be registered compulsorily.

The details required at the time of registration of documents include details of property, number of floors, built-up area, survey number, ward, taluk etc. It is advisable to get them registered because the title is additionally secured. It facilitates availing a loan from a bank too.

Certified true copies of the documents can be obtained from the registering authorities after completion of index. Then, at any point in time, one can establish bonafide title to the property.

Stamp duty

All property transactions involve stamp duty. The buyer needs to pay the relevant stamp duty at the time of purchase of the property . The duty is paid to the State government, where the property is situated.

The stamp duty rates vary from State to State. The registration of the property documents is done after payment of the requisite stamp duty. Many States now have the facility of payment of e-stamps.

TDS

Effective June 1, 2013, tax is to be deducted at source (TDS) on payment for the purchase of property (including any land other than agricultural land, any building or part of a building) at one percent according to Section 194IA. This tax is to be deducted at 20 percent should the seller not have a PAN.

This rule comes into effect only if the purchased property's cost exceeds Rs 50 lakhs.

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