Buyer's Guide

Documentation

  • Ownership document of the property owner & buyer
  • Agreement to sell – Includes a description of the property, terms of conditions between the buyer and the seller, including agreed purchase price.
  • Absolute sale deed and title deed - This is the actual transfer record of ownership of the property. It is registered at the sub registrar’s office under whose jurisdiction the property would fall.
  • Title search and report – This document records the history of the property and its owner and has to be registered with the concerned authority.
  • Khata certificate - Provides proof that the property has an entry in the local municipal records.
  • Receipt of property tax – This document clarifies the status of previous taxes paid/due.
  • Encumbrance certificate – This states that the property is free from all encumbrances or loans
  • Sanctioned building plan by statutory authority - This is to ensure that the buyers are watchful about any deviations from the sanctioned plan made by the developer.
  • Power of Attorney (If any) – If any person is acting on the authorization of the owner of the property.

  • Possession letter from the builder The original copy of possession letter should be received by the buyer on the specified date in the letter.
  • Payment Receipt – This is the most important document for home loan and should be taken by the buyer from the seller. It can be used during the resale of the property.
  • Property documents for loan purpose –
    1. List of original property document
    2. Closure letter with a penalty (if any)
    3. NOC by the bank
  • Sale agreement – An original sale agreement needs to be obtained as a sale deed for the property. It includes terms & conditions for the sale along with the time of completion, payment/part payment details of the purchase.
  • Property Tax receipt (till the date of registration) – Tax receipt consists of property details such as property area, owner’s details among other related information. Tax is levied on the purchase of property which acts as one of the most important documents during ‘agreement to sell’ process. All the pages of the document should be signed by all the parties.

  • Stamp Duty
    Stamp duty is the transactional tax levied compulsory, which plays a key role in the transactions made on a property. It is pretty much similar to what a government collects for sales tax and income tax. Stamp duty is charged on the present agreement value or market value, whichever is high. It is levied by states and therefore, the rate varies from state to state.
    Stamp Duty can be paid by Franking (submitted documents are processed by authorized banks via a franking machine), Stamp Paper (long & inconvenient method) & E-stamp (NEFT/RTGS).
  • Registration Charges
    If the property is located in Corporation or Municipal Council area – 5% Stamp Duty, 1% LBT and 1% Registration Charges or up to Rs. 30,000/- whichever is less.
    If the property is located in Rural area – 4% Stamp Duty, 1% LBT and 1% Registration Charges or up to Rs. 30,000/- whichever is less.

Tax Benefit

  • After your home loan is approved and you start paying EMIs, you pay for it in two parts - the principal amount and the interest. Under section 80C, the total amount of principal paid by you in a financial year (1 April to 31 March) can be claimed as a deduction from gross total income. This is a very big relief provided by the Government as you are required to pay hefty equated monthly instalments (EMI).

  • Homeowners can file a claim for deduction on their home loan interest of up to Rs. 2 Lakhs. This is applicable if the owners are living in the property or if it is vacant as well. In case, if you have put your property on rent, then the entire interest on the home loan can be deducted. However, your deduction on interest is limited to Rs. 30,000 instead of Rs 2 lakhs if both the following conditions stand satisfied:
    1. The loan is taken on or after 1 April 1999
    2. The purchase or construction is not completed within 5 years from the end of the FY in which loan was availed

  • Under Section 80EE of the Income Tax Act, the homeowners with only one house property on the date of sanction of loan can avail the tax benefit of up to Rs.50,000.
  • *These benefits are not available for an under-construction property.
  • Do you own more than one house?
    If you own more than one house, you need to file the ITR-2 form.

  • If you are applying for a joint home loan along with your spouse, friend or a relative and you are co-owning the property then you are eligible for tax benefits. And can each applicant can make a claim up to the full amount under Section 80C and Section 24.

  • House Rent Allowance (HRA) is a salary component, allotted by the employer towards employees rent accommodation. It is very beneficial for the employee as it gets calculated for tax deduction purposes while filling TDS for a financial year.
  • In case, you have a home loan for your property, and you are living in another apartment on rent, then you are allowed to make two separate claims. One is for the home loan tax benefit and another for the benefit pertaining to HRA (House Rent Allowance). List of documents required for both are different, so, plan in advance and keep them ready to enjoy the maximum tax benefits under such condition.

  • You own a property and you have put it on rent, now you are receiving a monthly income (known as ‘annual value’) from that property, then the rent amount becomes taxable. But if the owner is using the property for operating or running a business, it will not be taxed as it comes under income from home property.
  • If an individual owns a house property, the rent he receives from the house becomes taxable. This received rent is referred to as. However, the taxpayer can save the tax on this. If he uses this property
  • Income from House Property is Taxable If:
    1. The house property comprises of the building and/or any land attached to it
    2. The taxpayer is the owner of the property
    3. The taxpayer should not use the house property to run any business or profession

  • Following are the basic provisions of Wealth Tax law which are to be kept in mind:
  • Wealth-tax is levied on the following persons only:
    1. An individual;
    2. A Hindu undivided family (HUF); and
    3. A company.
  • Persons other than individuals, Hindu Undivided Families (HUFs) and companies are not liable to pay wealth tax.
  • Wealth Tax was abolished in 2015 and after its abolishment, the finance minister hiked the surcharge from 2% to 12% for the super-rich section. Any individual with income more than Rs. 1 Crore and companies with income over Rs. 10 Crores make India’s super-rich segment.
  • Wealth Tax is applicable to individuals, HUF (Hindu Undivided Family) or companies. If the total net wealth of an individual, HUF or company exceeds Rs. 30 lakhs, on the valuation date, 1% tax will be leviable on the amount in excess of Rs. 30 lakhs.
  • Following are the entities which are not liable to pay wealth-tax:
    1. Any company registered under section 25 of the Companies Act;
    2. Any co-operative society;
    3. Any social club;
    4. Any political party;
    5. A Mutual Fund specified under section 10(23D) of the Income-tax Act; and
    6. Reserve Bank of India
  • Wealth-tax and residential status
    A person who own assets in India and abroad, need to assess few things before filing the wealth tax. Basis the residential status and the location of the asset, the taxability of an asset will be determined. The residential status will be ascertained in the same manner as is determined under Income-tax Law.
  • Following persons are liable to pay wealth-tax in respect of their assets (i.e., on the assets located in India as well as on the assets located outside India):
    1. A resident and ordinarily resident individual, who is an Indian citizen.
    2. A resident and ordinarily resident HUF.
    3. A resident company.

Home Loans

  • Type of borrower
  • Age of the applicant
  • Income of applicant
  • Agreement value of the property to be purchased
  • The purpose of the loan
  • Nature of property

  • Proof of Identification:
    1. Driving license
    2. Aadhar card
    3. Ration card
    4. Passport
    5. PAN card
    6. Voter’s ID card
    7. Employee ID
    8. Bank passbook
  • Proof of Age:
    1. PAN card
    2. Birth certificate
    3. 10th class marksheet
    4. Bank passbook
    5. Passport
    6. Driving license
  • Address Proof:
    1. Bank passbook or Bank account statement
    2. Voter’s ID
    3. Ration card
    4. Passport
    5. Utility bill (telephone, electricity, water, gas) – less than 2 months old
    6. LIC policy/ receipt
    7. Letter from a recognized public authority verifying the customer’s residence address
  • Income Documents:
    Salaried individuals (any one of the following):
    1. Form 16
    2. Certified letter from Employer
    3. Pay slip (Last 2 months)
    4. Increment or Promotion letter
    5. IT returns (for 3 years)
    6. Apart from the proof of income of the salaried individual, he would also have to furnish any investment proofs (like fixed deposits, shares, etc.) and his passport-size photographs.

    Self Employed or businessman (any one of the following):
    1. Last 3 years Income tax returns of the applicant along with computation of income duly attested by a Chartered Accountant
    2. Last 2 years Balance Sheet and Profit & Loss account of the firm- duly attested by a Chartered Accountant

    Apart from these, a self-employed individual also has to submit:
    1. A brief introduction of his profession/business
    2. Passport size photographs
    3. Photocopy of Registration Certificate of establishment under Shops and Establishments Act/Factories Act
    4. Photocopy of Registration Certificate for deduction of Profession Tax
    5. Proof of investments
    6. Certificate of Practice
    7. Receipts of advance tax payments (if any)
  • Property Documents:
    1. Sale deed, agreement of sale with the builder (original copy)
    2. Land and building tax paid receipts, location sketch of the property certified by the revenue authorities, possession certificate
    3. Letter of allotment given by the Housing Board/Society/Private builder
    4. Original receipts of the advance payments that are made towards the purchase of flat
    5. An approved copy of the building plan (key plan/floor plan in case of purchase of flats)
    6. Original of the land tax paid receipt and possession certificate as issued by the revenue authority
    7. Original No objection certificate (NOC) from the housing society or builder
    8. Detailed estimate of the cost of construction of house
    9. Letter from the builder/society/housing board, stating their account number and name of their bankers for the remittance of installments

  • Yes, Hiranandani Communities has association with top Indian banks, which help in fastening the entire home loan process and let the buyer start their new journey with Hiranandani Communities.

  • Percentage of home loan available is decided by banks based on –
    1. Applicant’s salary/business income
    2. Their CIBIL Score
    3. Their ability to repayment

    After considering all these factors, banks can choose to provide you home loan up to 80% of the property price.

  • Check your CIBIL score before applying for the loan
  • Check the EMI that you can pay for the home
  • Get all the required documents in place
  • Estimate the payment which you can pay for the loan. Plan it early.
  • Check whether or not you are spending within your limits.

  • CIBIL Score is a three-digit numeric summary of your credit history. The score is derived using the credit history found in the CIBIL Report (also known as CIR i.e. Credit Information Report). A CIR is an individual's credit payment history across loan types and credit institutions over a period of time.

  • CIBIL score represents your credit worthiness and is used by banks and NBFCs during the approval of your loan process. It ranges from 300-900 points and one need to have a minimum of 750 to get a personal loan.

  • CIBIL Score should be checked well in advance before applying for a loan. If your score is less than 750, then you need to clear off all the credit you have and re-apply for the loan once your score is up.

Documentation

  • Valid passport
  • Address proof
  • Permanent Account Number (PAN card)
  • A recent photograph

Payment & Repayment

  • If they have the sufficient funds, then payment can be done easily. They can do so by remitting the money through authorized banking channels from abroad. They can also use money in their NRE/NRO or FCNR accounts for the payment.
  • If NRIs require a loan to pay for the property, then RBI has now granted permission to banks and housing finance institutions that are registered with the National Housing Bank to provide home loans for NRIs to buy residential property in India.
  • All transactions have to be made in Indian currency. NRIs cannot avail the loan into their accounts directly. It will be disbursed to either the seller’s or the developer’s bank account.
  • There is a provision of repayment of loan using the funds in an NRI’s NRO (Non-Residential Ordinary) /NRE (Non-Resident External) account or FCNR (Fixed Deposit Foreign Currency account) deposits.
  • Traveler’s cheques or foreign currency is not an acceptable means of payment.

Frequently Asked Questions

As per India's Foreign Exchange Management Act (FEMA) 1999, an NRI or Non-Resident Indian is a citizen of India, or a foreign national of Indian-origin, living outside India for employment, business or any other vocation, which would indicate his intention to stay outside India for an indefinite period. An Indian would also be termed as an NRI if his stay in India less than 182 days during the previous financial year (April-March).

A PIO is an individual (not a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan) who has at any time held an Indian passport. Or, one whose either/both parent/s or grandparents were citizens of India, according to the Indian Constitution or the Citizenship Act, 1955.

As per India's Foreign Exchange Management Act (FEMA) 1999, a person resident in India is a person residing in India for more than 182 days during the previous financial year (April-March) and who has come to, or stays in India either for employment, business or for any other vocation.

Yes, a foreign national who is a person resident in India can purchase immovable property in India but only after obtaining the approvals and fulfilling the requirements.

  • Can the property be hold by NRIs even after becoming an OCI card holder?
    Yes, a person who had bought residential/commercial property/agricultural land/ plantation property/farm house in India when they were an Indian citizen, can continue to hold that property without the approval of the Reserve Bank after becoming an OCI card holder.
  • Can they gift such properties?
    Yes, they can. Transfer residential or commercial property in India by gifting it to a person resident in India or to a person resident outside India and is a citizen of India or to an OCI card holder resident outside India.
  • Can the property be rented?
    Yes, OCI card holders can rent out their properties in India. For more information on this matter, please follow the link: https://www.rbi.org.in/scripts/FAQView.aspx?Id=33#F2

No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India.

He/she can acquire or transfer immovable property in India, on lease, not exceeding five years. In such cases, there is no requirement of taking any permission of/ or reporting to the Reserve Bank of India.

  • The repatriation of sale can be done for maximum of 2 properties, only in case when the purchase was made through an NRE account, not otherwise.
  • The amount repatriated should be equal to what you have paid for the acquisition of the immovable property in the foreign exchange received through normal banking channels, or from the funds held in FCNR or NRE Account.

Yes. A Foreign National of non-Indian origin, including a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, can acquire residential properties on lease in India. If the lease is not exceeding five years, he/she does not require any prior permission from the RBI.

  • A flat, apartment, villa or a plot are the properties in which an NRI is eligible to apply for home loans
  • For construction of a property on a plot of land by self
  • To purchase a plot allotted by a society/development authority
  • To renovate or improve upon an existing property in India
The eligibility is calculated in the same way as it is done for resident Indians with special emphasis on:
  • Qualifications - Graduate (minimum)
  • Current job-profile and work experience
  • Chances of continuing working abroad for the duration of the loan’s tenure
  • Chances of servicing the loan with an extended tenure, in case the applicant needs to return to India
Documents required by NRIs are:
  • Passport
  • Proof of their works contract or the labor card
  • POA – in case NRI won’t use the property directly

No tax benefits are available for NRI's, unless NRIs file the returns and becomes eligible to avail the benefits.

  • The housing loan needs to be paid upfront for the entire tenure of the loan, by way of direct remittances from abroad through normal banking channels, or from other financial accounts as may be permitted by RBI
  • Generally, payments are done through NRO, NRE, NRNR and FCNR accounts. These allowed accounts may change as per RBI regulations

Home loan for NRIs do not exceed 5 years in major cases. However, some financial institutions offer loans for a term of 7 years as well.

EMI Calculator

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