Stamp Duty is governed under the Indian Stamp Act, It is a type of tax which is levied by the government under its jurisdiction concerning the purchase of a property. This property could be land, an independent house, a commercial or a residential flat. This stamp duty is payable as per Section 3 of this Act.
The duty includes in its ambit sale deeds, gift deeds, partition deeds, conveyance deeds, power of attorney, lease deeds, etc. This duty varies from state to state and is collected during the registration, as a percentage of the saleable value of the property. It can also differ on the basis of the type of property — whether it is new or old; or on the location of the property. This functions as a legal document and can be used as a piece of evidence for the purchase or sale of any property.
According to Section 49 of the Indian Registration Act, if the property documents are not registered, then they would not have any stance on the property. Further, the property documents do not grant any property rights over the property. The following documents are required for NRIs for a successful property registration:. The NRIs also have to produce and attach the payment details concerning the residential unit with proof and have to mention the same in the receipt clause of the Conveyance Deed.
Further, for the purpose of registration, if the NRIs do not have any of the cards as mentioned above are required to seek permission from the concerned district collector. The procedure for acquisition and transfer of immovable property is laid down in the Master Direction titled Acquisition and Transfer of Immovable Property under Foreign Exchange Management Act, Such a person can also transfer any immovable property.
A non-resident Indian can buy as many properties as they want under the aforementioned categories as per the regulations issued by the RBI and the income tax laws.
They are also allowed to gift or sell such immovable properties to another NRI or any Indian resident. If the NRI investor cannot come to India, then the purchase can be executed by another person who is given a legally binding power of attorney.
The exception to the aforementioned transactions is that an NRI can neither purchase nor transfer agricultural land, plantation property or a farmhouse. The RBI considers such applications on a case to case basis. A non-resident Indian investing in a residential or commercial property in India is bound to carry out all the transactions in Indian currency via local banks. The Reserve Bank has granted general permission to selected financial institutions for the purpose of providing housing finance.
The repayment of such loan must be made within a duration not exceeding 15 years. It is a fixed-term bank account that is opened by an NRI for transferring their foreign earnings in the same currency. The property card, original documents and proof of payment of stamp duty all have to be submitted to the sub-registrar for successful registration of property. For NRIs wondering if they need to physically be in India to get all the paperwork done — the answer is — no!
You as an NRI do not physically have to be present to complete the registration process. When you decide to invest in property in India, the current owners of the property have to produce the relevant documents verifying their authentic ownership of the property, if you do not obtain the original documents, you may end up losing money and ownership of the property.
It is also important that you ensure there are no encumbrances. This could create difficulties in the transfer of property from one owner to another. Examples include outstanding mortgages, unpaid debt, unpaid property taxes, etc. An investor should be careful and check for any such encumbrances on the property before purchasing it. The basic list of property documents that an NRI needed during property buying in India are:.
Based on the location and type of property, you will need to get an accurate estimation done of the value of the property. You will have to ensure you do it according to current market trends. General PoA: Under a general PoA, broad powers are granted to the representative to make decisions on behalf of the principal. Besides, the representative can also carry out the various activities on behalf of the principal without any limitation on transactions. A specific clause can be inserted in the document, stating that the representative's power would remain valid even if the principal becomes incapacitated.
In cases where a property has numerous owners, it would be difficult for all the people concerned to collectively complete a transaction. In such cases, granting the power of attorney to one person would make matters simple. As a result, this person would be empowered to act on behalf of all the owners collectively. Step 2 : Along with the legal representative and two witnesses, the person is now required to visit the Sub-Registrar's Office.
Step 3 : It should be ensured that all the persons going to the Sub-Registrar's Office are carrying their valid identity proof. Photocopy of the POA, along with the original copy, must also be taken along.
Step 4 : At the Sub-Registrar's office signatures, photographs and fingerprints of the party will be collected. Consequently, under the existing regulations, NRIs cannot purchase farmhouses in India. What if a person who owns properties in India, subsequently, becomes an NRI? Such a person can continue to hold the property in his name in India.
An NRI is also allowed to continue to own any agricultural land, plantation property, or farmhouse that he owned when he became an NRI, which he is otherwise not allowed to purchase, after becoming an NRI. They are also allowed to let out the property, irrespective of when it was acquired.
The rent received from such property, can be remitted, after appropriate Indian taxes have been paid on such rent. Likewise, any NRI is allowed to sell, or gift an immovable property to any person resident in India.
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