RBI

NRI

Who is a NRI ?

A NRI is a person resident outside India who is either a citizen of India or a person of Indian origin. A NRI is an Indian Citizen who has migrated to another Country. For all official purpose the Government of India considers Indian National away from India for more than 182 days, in a year.

Who is a PIO?

A person of Indian origin means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who:
i) held an Indian Passport at any time, or
ii) who or whose father or paternal grand father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955.

What are the types of Property can a NRI/PIO purchase in India?

There are no restrictions on the numbers of Residential/Commercial Properties (other than agricultural land/farm house/plantation) that can be purchased.

Do NRI/PIO require permission of The Reserve Bank to acquire residential/ commercial property in India?

No. All Indian citizens are entitled to buy property in India, irrespective of their residential status.

How should the purchase of residential immovable property be paid for by NRI/ PIO under the general permission?

The purchase consideration should be met either out of inward remittance in foreign exchange through normal banking channels, or out of funds from NRE/FCNR(B)/NRO accounts maintained with banks in India.

Does a NRI/PIO, requires to have a company in India or abroad or both for purchasing of property?

No

Can NRI/ PIO’s acquire or dispose residential property by way of gift?

Yes, NRIs and PIOs can freely acquire immovable property in India by way of gift either from
(i) person resident in India
(ii) NRI
(iii) PIO
However the property can only be commercial or residential.
Again NRIs and PIOs may gift residential/ commercial property to
(i) person resident in India
(ii) NRI
(iii) PIO
(iv) Foreign national of non Indian origin – with approval of RBI

Is there are any Lock in period for such investment?

Currently there is no lock in period.

Can NRI/PIO sell their purchased property without the permission of Reserve Bank?

Yes. Reserve Bank of India has granted general permission for sale of such property to the following categories:-
-To a NRI
-To a PIO (If the seller is a PIO, then a prior approval is required from RBI)
-To a person Resident of India

Can the sale proceeds of such property (if and when sold) be remitted/repatriated out of India?

Yes the sale proceeds can be remitted/repatriated out of India
In the event property acquired out of foreign exchange source i.e. remittance through normal banking channels/ debit to NRE/ FCNR(B) accounts, the amounts to be repatriated should not exceed the amount paid for such property from such source. However, repatriation of sale proceeds purchased out of foreign exchange is restricted to not more that two residential properties, in a block of one year, with a facility of crediting the Capital gain to the NRO account.
Again in the event the property was acquired out of Rupee source, an amount not exceeding USD one million, per financial year, subject to tax compliance, out of balance held in NRO account, may be remitted/repatriated.

In case of repatriation is there any tax liability to the Indian Government?

Yes, during repatriation Capital Gains (Long Term/Short Term) as applicable will be attracted.
Long Term Capital Gains: For properties held for 36 months or more are termed as
Long Term Capital Assets, and currently attracts a rate of 22.6%
(Fin. Year: 2007-08)
Short Term Capital Gains: For properties held for less than 36 months are termed as
Short Term Capital Assets, and currently attracts a rate of 33.9%

Can rental Income be repatriated?

Repatriation of income derived out of letting of immovable property is permissible. NRI/PIO can rent out the property without approval of Reserve Bank. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, interest, dividend etc. of NRI/PIO who do not maintain an NRO account in based on an appropriate certification by Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/ provided for.

General

Types of Power of Attorneys?

  • To Sell – Power of attorney to sell a property
  • To Recover Debt – To recover property related loans/debts.
  • Power of Attorney by a firm
  • Power of Attorney by trustee
  • GPA (General Power of Attorney) to a manager of the estate
  • Specifica Power of Attorney by the Owner to the Builder to get Building Plans Sanctioned, Clear Dues….Get Permissions etc

Detailed Meaning of Leasehold and Freehold Property?

Leasehold Properties –

A property (plot/built up) in which the perpetual leasehold has been granted by the “Title Paramount” (President of India) in favor of the lessee. The title paramount acts through organizations such as DDA and L&DO in case of such properties. Leasehold properties are not freely transferable. Depending upon the covenants of the lease deed, prior permission of the lessor (DDA/L&DO) is required to transfer the property.
Freehold Properties –
A property, where title paramount has conveyed the property in favor of the purchaser by conveyance/sale deed. With “no restriction” over the “owner” on the right to further transfer the property. Record of ownership of the freehold property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.

How many floors can be constructed on a residential property?

Basement + Stilt Car Parking + Ground Floor + First Floor + Second Floor + Third Floor + Entire Terrace Garden.

Note : Often there is a rumour of  an additional floor being allowed ie. 4th Floor (Fourth Floor)…..right now it is only allowed to construct till third floor but it is a fact that Delhi can only expand vertically…So, Delhi market will surely see a realty boom after the arrival of an additional 4th floor.

What is a good time to invest in real estate?

Real estate may and should never be compared to trends in the stock market or bullion trading; hence ascertaining the “right time” to invest. Property prices may stabilize during lean economic periods yet South Delhi has rarely seen a “drop” or a distress market even in its weakest financial phase. Subject to requirement, budget and preference, any time is a good time!

What Is Leasehold Property ?

Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed and mutually agreed by the Lessor and lessee. The land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property.

Detailed meaning of Carpet Area, Builtup Area and Super Builtup Area?

Carpet Area is the area enclosed within the walls, actual area to lay the carpet.
  • This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
  • Built up Area is the carpet area plus the thickness of outer walls and the balcony.
  • Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.

What is meant by valuation of property?

The valuation process evaluates the market value of the property. Demand and supply forces operating in the market, as well as other factors like type of property, quality of construction, its location, the local infrastructure available, maintenance, are all taken into consideration before the market value is decided.

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

The area of an apartment or building, not inclusive of the area of the walls is known as carpet area. This is the area that is actually used and in which a carpet can be laid. When the area of the walls including the balcony is calculated along with the carpet area, it is known as built-up area. The built-up area along with the area under common spaces like lobby, lifts, stairs, garden and swimming pool is called super built-up area.

What constitutes conclusion of sale of a property?

An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. Usually, the entire amount is paid at the time of handing over possession.

Are there any income tax considerations while transferring newly acquired property?

If the transfer takes place within three years of purchase, the income tax exemption under Section 54F of the Income Tax Act does not hold good.

What does the term ‘Freehold Property’ mean?

When ownership rights for a piece of property are given to the purchaser for a price, that property is referred to as Freehold Property. Unlike in the case of leasehold property, no annual lease charges need to be paid and the freehold property can be registered and/or transferred in parts.

What does the term ‘Leasehold Property’ mean?

When a piece of property is given or ‘leased’ to an individual (known as the ‘Lessee’) for a stipulated period of time, by the owner of the property (known as the ‘Lessor’), the property is referred to as Leasehold Property. A certain amount is fixed by the Lessor to be paid as lease premium and annual lease. The land ownership rights remain with the Lessor. Transfer of property requires prior permission.

What is the meaning of property’s market Value? How is stamp duty decided?

The price that a property can command in the open market is known as its market value. Stamp duty is based on the market value or the agreement value of the property, whichever is greater.

Buying

What are the standard norms for Capital Gain Tax?

The owner of a property (commercial and residential) is liable to pay capital gain tax in the event of sale of the immovable asset. It is categorized as below:
• Long Term capital gain: 20% tax to be borne for properties retained for 3 years and above from the date of ownership.
• Short Term capital gain: 30% tax to be borne for properties retained for less than 3 years from the date of ownership.

In case a property is held under the name of a company, what are the important aspects which one must verify before purchasing?

Before purchasing the property, they should verify (from the Registrar of Companies) and confirm that the property is not mortgaged or otherwise under collateral security against any loan etc.

Are the deals based on registered power of attorney/registered will/original allotment letter/agreement to sell, legally safe?

Yes, such deals are considered legally safe. One may administer due diligence for ensuring no litigation/loan/dispute against such property for further peace of mind.

What are the documents required to purchase a freehold property?

The documents required are:
• Copy of the registered sale/conveyance deed edifying the seller’s title.
• Duplicates of all earlier sale deeds (if any).
• Agreement to sell
• Receipt of payments made to seller (in original and duplicate, for convenience and handling)
• Copy of approved plan of construction
• Title search report attained from the concerned competent authority.

What are the benefits of getting a leasehold property converted to a freehold property?

  • One can become the rightful complete owner of the property by simply getting the sale deed of the property after getting it registered.
  • It enhances the property’s market potential for future trading.
  • The property can be traded, mortgaged or kept for standing security as freehold and quantifiable asset without restriction.

Detailed Meaning of Leasehold and Freehold Property?

Leasehold Properties –

A property (plot/built up) in which the perpetual leasehold has been granted by the “Title Paramount” (President of India) in favor of the lessee. The title paramount acts through organizations such as DDA and L&DO in case of such properties. Leasehold properties are not freely transferable. Depending upon the covenants of the lease deed, prior permission of the lessor (DDA/L&DO) is required to transfer the property.
Freehold Properties –
A property, where title paramount has conveyed the property in favor of the purchaser by conveyance/sale deed. With “no restriction” over the “owner” on the right to further transfer the property. Record of ownership of the freehold property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.

How many floors can be constructed on a residential property?

Basement + Stilt Car Parking + Ground Floor + First Floor + Second Floor + Third Floor + Entire Terrace Garden.

Note : Often there is a rumour of  an additional floor being allowed ie. 4th Floor (Fourth Floor)…..right now it is only allowed to construct till third floor but it is a fact that Delhi can only expand vertically…So, Delhi market will surely see a realty boom after the arrival of an additional 4th floor.

What is a good time to invest in real estate?

Real estate may and should never be compared to trends in the stock market or bullion trading; hence ascertaining the “right time” to invest. Property prices may stabilize during lean economic periods yet South Delhi has rarely seen a “drop” or a distress market even in its weakest financial phase. Subject to requirement, budget and preference, any time is a good time!

On what basis is the amount of the home loan decided? or on what basis a capacity of a person to repay the loan is evaluated ?

The amount of the loan for each individual depends on the following factors:-
  • An Indian resident or NRI
  • The income of the family applying for the loan.
  • Above 21 years of the age at the commencement of the loan.
  • Below 65 years when loan matures.
  • Number of dependants.
  • Qualifications.
  • Assets and liabilities.
  • Either salaried or self employed

Can I repay the loan ahead of schedule ?

Yes, you can repay a loan ahead of schedule. Some Home Finance Companies charge a pre-payment penalty.

What is a Draft Sale Deed ?

A draft Sale Deed, containing full details of the parties, advance amount paid, mode of balance amount payable, receipt of the balance amount by the seller, handing over the original documents of the property, handing over the possession of the property, handing over the authorization letter to transfer power and water meters, signing of the application for transfer of khatha, title of the seller of the property, indemnifying the purchaser in case of defect in the title, easement rights, will be prepared by the purchaser’s advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall be signed by the purchaser’s advocate.

What is a Sale Deed ?

Sale Deed also known as conveyance deed, is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

Checklist for buying residential or commercial property.

Identify the property you wish to purchase
  • Crosscheck of current market rates of property in the vicinity and last known transactions, current market trends.
  • Formulate commercial terms.
  • Distinguish between negotiable and fixed terms and conditions of the contract, eg. Price, payment schedule, time of completion etc.
  • Avail of services of Propmart for legal opinion, valuation or property related matters.
  • Check for clear titles of the property. Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any on the property must be cleared before completion of purchase of the property.
  • Finalise commercial terms of purchase of the property. Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.
  • Ascertain outgoings to be for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.
  • Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.
  • If you are looking for loan for property purchase, contact financial institutions and ask for a pre approval letter, many options are available for loans. Propmart can also assist you for loan requirement.
  • Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration.
  • After payment of the entire sale price, take over legal possession of the property and check the receipt of original documents from the Vendor of the property.
  • Make sure that property holder’s name is changed in all related records, e.g. society, Electricity Company, municipal corporation, water supplying company…

Should I inspect a property before buying it ?

Yes,
It is important to inspect the property, probably this is the largest single investment you will ever make. You should know all the details of the property and need for any major repairs / modifications before you buy. You can crosscheck the commitment made by builder and actual implementation. A close inspection points out the positive aspects of the property, as well as the maintenance that will be necessary to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase.
  • Few important points to check while inspecting…
  • Plumbing systems, drainage, water faucets and sanitary fittings.
  • Electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings
  • Roof, walls, ceilings, floors, paint work.
  • Foundation, basement and visible structures.
  • Doors and windows, latches, locks.
  • Structural stability of the building.

How can knowing the Carpet Area, Built-Up Area & Super Built-Up Area of a flat help me in purchasing a flat?

This break up is extremely essential as builders can place anywhere from 65% to 85% per cent of the super built area as carpet area. That means, if the price is quoted as 1,000 sq ft super built up area, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the vendor/ builder mention it in the sale deed.

Detailed meaning of Carpet Area, Builtup Area and Super Builtup Area?

Carpet Area is the area enclosed within the walls, actual area to lay the carpet.
  • This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
  • Built up Area is the carpet area plus the thickness of outer walls and the balcony.
  • Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.

What should a purchaser keep in mind while purchasing a residential flat?

 

  • Locality – Proximity to workplace, educational institutions, hospitals, shopping areas, entertainment centres, transportation, pollution levels.
  • Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area
  • Car parking space
  • Quality of construction
  • Reputation of the builder or seller
  • Sufficient water and electric supply, other utilities
  • Cost components: price, stamp duty, registration charges, transfer fees, maintenance charges, any other payments
  • Appreciation of the property for resale and rental.
  • Any other distinguishing features or advantages of the property

 

Taxation

What are the standard norms for Capital Gain Tax?

The owner of a property (commercial and residential) is liable to pay capital gain tax in the event of sale of the immovable asset. It is categorized as below:
• Long Term capital gain: 20% tax to be borne for properties retained for 3 years and above from the date of ownership.
• Short Term capital gain: 30% tax to be borne for properties retained for less than 3 years from the date of ownership.

What could be the additional formalities/complications for holding properties under company ownership?

In the event of any income from the property, Income Tax liable is more than what an individual is supposed to pay. Taxes and all charges are administered as per the Corporate Tax laws.

What is the advantage of holding a property under the ownership of a company rather than an individual?

The advantage is that the property can be transferred along with the company without any payment duty or securing any Income Tax Clearance Certificate under 34-A and 37-I.

Documentation

How do registry charges vary for family and/or women?

In the event of registry done in the name of a female, the applicable charge is equivalent to 5% of circle rate value. 6% of circle rate value in case of combined (male & female) and 7% for individual (male) and/or corporate registry.

How can a lease agreement be created?

Lease agreement of an immovable property can be created by two methods:
1. Registered lease agreement in cases where the lease is from year to year or exceeding one year rent or reserving yearly rent. In such cases the instrument must be executed by both the lessor and the lessee.
2. Oral agreement followed by delivery of possession in other cases.
If a lease agreement does not contain an escalation clause, can the lease amount still be escalated upon renewal?
There is a provision in the Rent Control Act that entitles the lessor to an escalation of minimum 10% on previous amount after every 3 years. The escalation percentage may vary subject to lease agreement and terms agreed upon mutually between lessor and lessee.

What is a Draft Sale Deed ?

A draft Sale Deed, containing full details of the parties, advance amount paid, mode of balance amount payable, receipt of the balance amount by the seller, handing over the original documents of the property, handing over the possession of the property, handing over the authorization letter to transfer power and water meters, signing of the application for transfer of khatha, title of the seller of the property, indemnifying the purchaser in case of defect in the title, easement rights, will be prepared by the purchaser’s advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall be signed by the purchaser’s advocate.

What is a Sale Deed ?

Sale Deed also known as conveyance deed, is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

Transfer

How do registry charges vary for family and/or women?

In the event of registry done in the name of a female, the applicable charge is equivalent to 5% of circle rate value. 6% of circle rate value in case of combined (male & female) and 7% for individual (male) and/or corporate registry.

What are the benefits of getting a leasehold property converted to a freehold property?

  • One can become the rightful complete owner of the property by simply getting the sale deed of the property after getting it registered.
  • It enhances the property’s market potential for future trading.
  • The property can be traded, mortgaged or kept for standing security as freehold and quantifiable asset without restriction.

Detailed Meaning of Leasehold and Freehold Property?

Leasehold Properties –

A property (plot/built up) in which the perpetual leasehold has been granted by the “Title Paramount” (President of India) in favor of the lessee. The title paramount acts through organizations such as DDA and L&DO in case of such properties. Leasehold properties are not freely transferable. Depending upon the covenants of the lease deed, prior permission of the lessor (DDA/L&DO) is required to transfer the property.
Freehold Properties –
A property, where title paramount has conveyed the property in favor of the purchaser by conveyance/sale deed. With “no restriction” over the “owner” on the right to further transfer the property. Record of ownership of the freehold property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.

What Is Leasehold Property ?

Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed and mutually agreed by the Lessor and lessee. The land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property.

Renting

How can a lease agreement be created?

Lease agreement of an immovable property can be created by two methods:
1. Registered lease agreement in cases where the lease is from year to year or exceeding one year rent or reserving yearly rent. In such cases the instrument must be executed by both the lessor and the lessee.
2. Oral agreement followed by delivery of possession in other cases.
If a lease agreement does not contain an escalation clause, can the lease amount still be escalated upon renewal?
There is a provision in the Rent Control Act that entitles the lessor to an escalation of minimum 10% on previous amount after every 3 years. The escalation percentage may vary subject to lease agreement and terms agreed upon mutually between lessor and lessee.

What is a lease?

Lease is a legal binding contract between the lessor and the lessee for possession and enjoyment of the profits of land/flat/shop on one side and recompense by rent or other consideration on another.

By-Laws

What are the benefits of getting a leasehold property converted to a freehold property?

  • One can become the rightful complete owner of the property by simply getting the sale deed of the property after getting it registered.
  • It enhances the property’s market potential for future trading.
  • The property can be traded, mortgaged or kept for standing security as freehold and quantifiable asset without restriction.

Detailed Meaning of Leasehold and Freehold Property?

Leasehold Properties –

A property (plot/built up) in which the perpetual leasehold has been granted by the “Title Paramount” (President of India) in favor of the lessee. The title paramount acts through organizations such as DDA and L&DO in case of such properties. Leasehold properties are not freely transferable. Depending upon the covenants of the lease deed, prior permission of the lessor (DDA/L&DO) is required to transfer the property.
Freehold Properties –
A property, where title paramount has conveyed the property in favor of the purchaser by conveyance/sale deed. With “no restriction” over the “owner” on the right to further transfer the property. Record of ownership of the freehold property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.

Can corporate firms/houses utilize residential areas for commercial purposes?

The practice of opening offices in residential areas is illegal and punishable. However, in the usual course of business, service based industries are allowed to open their offices in such residential colonies and normally utilize (to the tune of) 25% of ground floor area. But any complaint by owner/residents/RWA is held material for them to vacate the premises.

How many floors can be constructed on a residential property?

Basement + Stilt Car Parking + Ground Floor + First Floor + Second Floor + Third Floor + Entire Terrace Garden.

Note : Often there is a rumour of  an additional floor being allowed ie. 4th Floor (Fourth Floor)…..right now it is only allowed to construct till third floor but it is a fact that Delhi can only expand vertically…So, Delhi market will surely see a realty boom after the arrival of an additional 4th floor.

Selling

What are the benefits of getting a leasehold property converted to a freehold property?

  • One can become the rightful complete owner of the property by simply getting the sale deed of the property after getting it registered.
  • It enhances the property’s market potential for future trading.
  • The property can be traded, mortgaged or kept for standing security as freehold and quantifiable asset without restriction.

Home Loan

What is the best way to select the cheapest home loan ?

Keep the loan period constant and calculate the total amount paid for the home through the different loan options available.

What is the home loan amount generally granted by financial institutions ?

The amount of home loans granted by various financial institutions generally is between 2 lakhs to 15 crores and between 70% to 100% (under special schemes) of the purchase price.

What is an EMI ?

EMI – Equated Monthly Installments, is the amount payable to the Housing Finance Institution every month, till the loan is paid back in full, comprising of portion of interest and principal. EMI is to be paid every month through post dated cheques or through direct deductions from the salary.

What are the other costs in Home Loans?

Processing Charge : It’s a fee payable to Home Finance Companies on applying for a loan. It is either a fixed amount not linked to the loan or may also be a percentage of the loan amount.
  • Pre-payment Penalties: When a loan is paid back before the end of the agreed duration, a penalty is charged by some banks/companies, which is usually between 1% and 2% of the amount being pre-paid.
  • Commitment Fees: Some institutions levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
  • Miscellaneous Costs: It is quite possible that some lenders may levy a documentation or consultant charges.
  • Registration of mortgage deed.

What is the security required against the home loan ?

The main security for a home loan is the first mortgage of the property to be financed, normally by way of deposit of title deeds and /or such other collateral security as may be necessary. In addition interim security may be required, if the property is under construction. The documents of title will be kept in the safe custody of the Home Finance Companies until repayment of the loan.

What is the difference between monthly rest and annual rest?

Monthly Rest : the interest is calculated on the outstanding principal loan at the beginning of every month.

Annual Rest : the interest is calculated on the outstanding principal loan at the beginning of every year.

What are the types of loans available depending on the interest charged?

Most Housing Finance Companies offer the fixed rate as well as the adjustable rate (Variable – Floating rate) home loan to customers
  • Fixed rate: where the rate of interest charged by the HFC on the loan is constant over the tenure of the loan.
  • Variable rate : Commonly known as Floating Rate, where the rate of interest charged by the Home Finance Companies on the loan keeps changing with respect to the rates in the market over the tenure of the loan.

On what basis is the amount of the home loan decided? or on what basis a capacity of a person to repay the loan is evaluated ?

The amount of the loan for each individual depends on the following factors:-
  • An Indian resident or NRI
  • The income of the family applying for the loan.
  • Above 21 years of the age at the commencement of the loan.
  • Below 65 years when loan matures.
  • Number of dependants.
  • Qualifications.
  • Assets and liabilities.
  • Either salaried or self employed

Can I repay the loan ahead of schedule ?

Yes, you can repay a loan ahead of schedule. Some Home Finance Companies charge a pre-payment penalty.

DDA

What are the misuse charges for putting the property to use other than what is permissible under the lease conditions?

As per terms and conditions of lease deed the lessee is not supposed to use the premises other than specified in the lease deed without the prior permission of the lessor. As and when a breach of misuse of the premises is noted a show-cause notice is sent to the lessee asking him to remove the breach within 30 days from the date of notice. The period can be extended to 60 days if the lessee gives cogent reasons. The process of re-entry (determination of lease deed) is initiated if the lessee neither remove the breach nor send any communication. However, on receipt of intimation from the allottee indicating the specific date of removal of breach the premises is inspected again and the charges for the breach are being recovered in the name of misuse charges. The formula for calculation of charges for the misuse of the property has been approved by the M.O.U.D.

Misuse Area Present Market Rates charged Size of plot X 13.9 X Period/100
Permissible
covered area
(p.sq.m)		 Rate
(p.sq.m)		 on allotment
(p.sq.m)

The market rates for various colonies likely to be adopted in the above formula are being finalized by the Land costing Wing for each year.

A decision to charge interest @ 12.5% p.a. if the delay is 30 days or less and @ 15% per annum for the period exceeding 30 days has been taken if the payment of misuse charges is not received within 30 days from the date of issue of demand letter of misuse charges.

What is unearned increase in case of transfer of lease property outside blood relation and formation of new company?

The allottees of Residential, Commercial/Industrial who sell/transfer their lease property outside the blood relation for which lessor’s permission is required which is being given subject to charging of 50% Unearned Increase in the market value of the plot as per lease deed terms. In the following cases the unearned increase is not being attracted :

  • Conversion of partnership firm into a private limited firm comprising original partners as Directors.
  • Change from Pvt. Ltd. Co. to Public Ltd. Co.
  • In case of addition, deletion or substitution of partners in a firm or directors and conversion of sole proprietorship firm or partnership concern into private limited company when change in constitution is intimated, for approval by the DDA, within one year from the date of purchase of plot in auction. This will not apply in case of plot obtained by the party by way of allotment.

The cases in which unearned increase is being charged are as under :

  • Addition of outsider not falling within the family members.
  • Substitution of the original allottee/auction purchaser.
  • 50% unearned increase is charged in respect of proportionate share of the plot parting with by way of addition, deletion or substitution of partner.
  • In the cases where a private limited company/public limited company separately floats a separate new company although directors may be the same.

The interest @ prevailing at the time of application on the unearned increase is charged from the date of receipt of application till the payment made by the allottee/company.

Source : DDA Website

Can i opt for Installment Payment Option or Cash Down Payment Option ?

No option, however if a flat is alloted on hire purchase then in the request of the allotee, mode of payment can be changed to cash down basis.

Source : DDA Website

How to get a flat in the choice of locality or floor?

Choice of locality in new schemes is offered but floor choice or allotment in a particular Sector/Pkt is not allowed as the allotment of the specific flat is made through computerized draw. G.F, flats are allotted under reserve quota to P.H. category registrants under 1% reserve quota. No lacality choice in the registration under NPRS-79, AAY-89 & JHRS-96.

How to get allotment of a DDA Flat?

DDA constructs residential flats under various categories , Higher Income Group Middle Income Group, Lower Income Group and Janta etc., As soon as the flats under any project are completed, flats are offered for allotment to the applicants who are already registered under its various Housing Registration Schemes under the categories of LIG & Janta etc.. Under HIG & MIG category, as soon as the flats are made available, applications from prospective buyers are invited through a public notice( appearing in the leading newspapers in English and Hindi both) for registration along with the registration money. The priced brochure containing the terms & conditions and the eligibility criteria is also put on sale through DDA sale counter at Vikas Sadan, INA and through the designated banks. Allotment of the flats are made through a computerized draw on scrutiny of the applications as per the eligibility criteria and the terms & conditions.