1. What is Registration ?

Registration means recording of the contents of a document with a Registering Officer. The documents are registered for the purpose of conservation of evidence, assurance of title, publicity of documents and prevention of fraud. Also, registration helps an intending purchaser to know if the title deeds of a particular property have been deposited with any person or a financial institution for the purpose of obtaining an advance against the security of that property. Thus, by Registration, a transaction of immovable property becomes permanent public record. Secondly, according to Transfer of Property Act right, title or interest can be acquired only if the deed is registered.

 

2. Which Documents require to be compulsorily registered ?

Section 17 of the Registration Act, 1908 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 :

(a) Instruments of gift of immovable property

(b) Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent.

(c) Instruments which create or extinguish any right or title to or in an immovable property of a value of more than one hundred rupees.

Under Section 2(6) of the Registration Act, 1908 the term “ Immovable property” includes:

“Land, buildings, hereditary allowances, rights to ways, lights, 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.”

 

3. What are the consequences of non-registration of a document which are

compulsorily registrable ?

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 an evidence in a court of law.

 

4. Who can present the document 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 (a) the concerned person himself/herself, or (b) the representative or the agent of such a person duly authorised in manner as stated in Section 33 of the Registration Act, 1908.

 

5. What should be the language of the document ?

The language of a document presented for registration should the one commonly used in that District. Under Section 19 of the Act, the Registering Officer is empowered to refuse to register a document if it is presented for registration in a language which is not commonly used in the district unless the document is accompanied by a true translation into a language commonly used in the district and also by a true copy.

 

6. How does one obtain certified copies of the registered documents ?

Any member of the public may obtain the certified copies of the registered documents of immovable property from the respective Sub-Registrar offices on application and payment of prescribed fees. A Stamp paper is required to be produced along with the application and the prescribed copying fee is to be paid.

 

7. Is the buyer/seller’s presence necessary in the Sub-Registrar office ? Is it possible to register a document at a person’s residence ?

Under Sections 31 of the Act, a provision has been made authorising the Registering Officer, on special cause being shown ( for instance if the person is physically handicapped) to attend at the residence of any person desiring to present a document for registration provided the Registering Officer is satisfied about the special cause shown is sufficient. The Registering Officer will come to the buyer/seller for completing registration formalities.

 

8. Why are photographs affixed at the time of registration ?

This has been done to avoid impersonation and fraudulent dealings. The purchaser/seller has to be present for the registration of property along with two photographs. Two persons must identify the executants. This is done to prevent

cheating and under hand dealings at the time of transaction.

 

9. Can a document presented for registration be withdrawn?

Any document presented for registration may be withdrawn before the process is completed i.e. before certification. The parties may also apply for refund of stamp duty and registration charges, where the full stamp duty and 50% of registration charges are refunded depending upon the circumstances.

 

10. Does a Deed of Rectification rectifying the mistakes in the names of the parties, the figures, the description etc. in the duly registered main document require registration ?

If the main document/agreement is registered, then in that event it is always necessary to register the Deed of Rectification also.

 11. Can a document relating to an immovable property in India be executed out of India ? If so, can it then be registered in India ?

Yes, 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 :

(a) the instrument was executed out of India.

(b) the instrument has been presented for registration within four months after its arrival in India.

 

 

STAMP DUTY

 

1. What is the value of stamp duty payable in respect of sale of an immovable property ?

Stamp duty is payable on the consideration amount mentioned in the sale deed or on the market value of the property as per the stamp duty fixed by the State Government.

2. How can stamp duty and registration fees be paid ?

Stamp duty can be paid by a pay order/demand draft and registration charges in cash.

 

3. Is there any Jurisdictional restriction on registration of property ?

Registration should be done in the Sub-Registrar’s office under whose jurisdiction the property falls. If the property falls under the jurisdiction of more than one Sub-registrar, registration may be done in any one of those Sub-Registrar’s office.

 

4. In a sale of immovable property who has to bear the stamp duty cost ?

Unless there is an understanding between the seller and the purchaser, the purchaser pays the stamp duty. However, in the case of exchange of properties both parties have to bear the stamp duty equally and it is payable on the value of one of the two properties, which is of the higher value.

 

5. In whose name one should purchase the stamp paper ?

A stamp paper has to be bought in the name of one of the parties whose names appear in the intended document for which the stamp paper is bought. A document on a stamp paper will be treated as not stamped and therefore defective if the party’s name is different.

 

6. Is it possible to claim refund of stamp duty ?

Refund should be claimed within six months from the date of purchase of the stamp paper. Refund on spoiled stamp paper can be claimed from the authorities concerned.

 

7. If an instrument is under stamped by accident or ignorance of the parties can it be rectified? If so what is the procedure ?

Yes. There is provision to rectify the mistake under Section 41 of Indian Stamp Act. The time limit is one year from the date of execution. The concerned parties on his own may bring the fact of under stamping to the notice of the Collector or District Registrar and agrees to pay the amount of the shortfall. If the collector or District Registrar is satisfied that the instrument is under stamped by accident, mistake or urgent necessity he may permit the party to pay the correct stamp duty and shall certify to that effect.

 

8. What is the stamp duty payable on exchange of properties ?

Exchange is a recognized mode of conveyance of property,where two properties are exchanged. The stamp duty is payable based on the market value of the property, whichever is higher,

What is the difference between built up area, super built up area, and carpet area?

Carpet Area: Carpet Area of a property is defined as the net usable area from the inner sides of one wall to another. Carpet Area comprises of the carpet area of the demised premise, toilet areas within the demised premises, AHU room/s within the demised premises and dedicated service areas for the demised premises.
Built-up Area (BUA): BUA consists of carpet area, area covered by inner and outer walls and additional areas mandated by the authority such as flower beds, dry balcony etc.
Super Built-up Area (SBUA): SBUA consists of BUA and the proportionate area under the common spaces of a building like lobby, staircases and elevators.

 

 

Is there any way by which I can claim exemption from tax on capital gain?

Several options are available for saving capital gains. For example, in the first place invest in a residential house property or a flat to make investment so as to see that capital gains are exempted. Likewise, if a person were to make the investment in REC or NHAI bonds then also he enjoys complete exemption from the long-term capital gain payable by him in respect of capital gains due.

 

 

What are the factors to keep in mind while investing in residential property for capital appreciation?

The fundamental aims of any residential property investment should be to maximise yield as well as capital gains and to reduce the risk as far as possible. To illustrate, renovating and embellishing a property makes it eligible for a higher rent, which means maximised yield. Property investment aimed at capital gains involves buying real estate cheap and selling it at a higher rate, thereby maximising one's ROI. An astute investor will also buy a well-located property at a high price if the rental market is booming, since this makes it possible to rent it out for as long as it takes price to rise again.

 

 

What are the possible returns of investing in commercial versus residential property on rent?

The rental yield for commercial property is usually 9-12%. In contrast, the yield for residential property is much lower at 3-4%.

 

 

What are the risks involved in residential property investment?

The risk factor in real estate investment lies in the possibility of buying at a higher price and having to sell at a lower one in a depressed market. It is also risky to try time the market to discern the 'best' time to invest. Much like in the stock market, it is impossible to predict the point of lowest ebb in the real estate market. The danger in delaying investment too long is two-fold - firstly, one may lose out on the best properties, and secondly, the market may pick up ahead of one's predictions, meaning that the lower rates may no longer be available.

 

 

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?

Market value of property is the price at which there is a willing buyer and a seller agreeing to the transfer the property at an arm's length transaction. Stamp duty is levied on the ready reckoner rate or the agreement price, whichever is higher.