Buyer's Guide

1. Home Loans

Who can apply for a housing loan?
Any person, including Non Resident Indians, with a steady source of income can borrow funds for financing the cost of a flat from housing finance companies and banks.

How much can a person borrow?
Loans are generally disbursed upto a maximum of 85% of the cost of the flat. The balance 15% cost of the flat is to be funded by the flat purchase from his own contribution.

What is an EMI?
Equated Monthly Installment ("EMI") is the amount comprising a portion of the interest and the principal loan amount which is payable by a borrower to the lender every month.

What is a fixed - rate housing loan?
A fixed - rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.

What is a floating interest rate housing loan?
A floating interest rate loan is a loan where the interest rate payable is linked to the market conditions such as a the bank retail prime lending rate and fluctuates with the bank rate varies. Floating interest rates are generally lower than the fixed interest rates.

What are the documents generally required to apply for a housing loan?
Latest salary slip (proof of income for salaried individuals)
Photographs
Proof of age
Identity papers
Proof of residence
Bank statements for the previous six months
For self employed Certified copies of balance sheet, profit and loss statement and tax challans / tax returns for the previous 3 years.
For partnership/private limited companies The Articles of Association, partnership deed and details about the firm.
For NRIs latest salary certificate specifying, Name (as it appears in the passport), Date of joining, Passport Number, Designation, Perquisites and salary, Photocopy of labour card/ identity card, Photocopy of valid resident visa stamped on the passport, Photocopy of monthly statement of local bank account Property related documents.

2. Stamp Duty

When is Stamp duty payable on an instrument in Maharashtra?
All instruments are liable to be stamped before or at the time of execution of instrument when executed in the State of Maharashtra.

Is there a time limit within which documents should be registered?
Documents must be registered within four months of the date of execution. Thereafter, documents may be registered on payment of penalty.

How is stamp duty paid in Maharashtra?
Various Banks and Financial Institutions have been authorised with a stamping/franking facility in some of their branches. Stamp duty can be paid by a pay order / demand draft drawn in favour of the concerned Bank/Financial Institution. The pay order / demand draft is to be accompanied with a covering letter from the issuing bank that the same is for payment of Stamp duty. A receipt is issued by the concerned Bank/ Financial Institution for the stamp duty amount.

What is the procedure for registration of an instrument?
Once adequate stamp duty is affixed on an instrument and it is dated, signed by the parties and attested (where required) by witnesses, it can be lodged for registration after payment of the registration fee. All parties signing the instrument are required to attend the office of the concerned Sub Registrar of Assurances either by themselves or through their constituted attorney to admit execution of the instrument. If the signatory to the instrument is different than the person present for registration, the power of attorney in such case will require registration. A copy of the PAN Card is essential for registration.

After lodging an instrument it is registered and seal of the Sub Registrar is affixed on the instrument, thereafter the original instrument is returned back to the parties.

Is there a time frame within which the stamp document must be executed?
Within six months from date of stamping a stamped document should be executed.

Is it possible to get a refund of stamp duty already paid on an instrument?
Yes. If stamp duty is paid on an instrument but the instrument is not signed by any party then an application is to be made to the concerned authorities for refund of stamp duty within six months from the date of stamping. On receipt of such application, the concerned authorities are empowered to refund the value of stamp duty after deducting such amounts as may prescribed.

Is there a procedure for adjudication of stamp duty?
A person can seek opinion of the Collector of Stamps by making an application to him for adjudication of stamp duty payable by such person on the instrument. For this purpose, the person has to submit the instrument and other evidences as required, along with prescribed fee. The Collector's opinion is final and conclusive.

Is an agreement for sale of a flat/ shop/ office required to be stamped and registered?
Yes. An agreement for sale of a flat/ shop/office is required to be stamped and registered as per applicable law.

3. NRI Guide

Who is an NRI under the provisions of Foreign Exchange Management Act?
An Indian Citizen who stays abroad for employment or is carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an non- resident Indian is an NRI. Person who is not resident in India for a period over 182 days is a non -resident Indian. Persons posted in U.N. organizations and officials deputed abroad by Central/State governments and Public Sector undertakings on temporary assignments are also treated as non - residents.

Who is a Person of Indian Origin (PIO)?
Under the provisions of Foreign Exchange Management Act a person of Indian origin is an individual (other than a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan) who at any time held an Indian passport, or he or his father or his grandfather was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955).

Do NRI's and PIOs require permission from Reserve Bank to acquire residential / commercial property in India?
NRI's and PIOs do not require permission from RBI to acquire residential / commercial premises in India (other than agricultural land/farm house/plantation property).

Can the sale proceeds of residential / commercial premises be remitted out of India?
The sale proceeds of immovable property other than agricultural land / farmhouse / plantation property can be remitted out of India on fulfillment of certain conditions.

Can NRIs obtain loans for acquisition of residential premises from authorized dealers / financial institutional providing housing finance?
Yes. NRIs can obtain loans. However repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the borrower's NRE/FCNR/NRO accounts.

Can Indian companies grant loans to their NRI staff?
Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.

Can NRIs and PIOs gift residential / commercial premises to relatives / registered chartiable trusts / organizations in India?
Yes. General permission has been granted by Reserve Bank to NRIs and PIOs to transfer by way of gift immovable property held by them in India to relatives and chartiable trusts/organisations subject to compliance of the condition the provisions of other applicable laws.

How should NRIs and PIOs make payment of the consideration for residential/commercial property?
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR/NRO accounts maintained with banks in India.