You can own as many properties as you want.

There are a few exemptions available for long term Capital Gains, if you:-

• Buy or construct a new house: - If you build a new house or buy one from the money you receive from selling a property, you are exempted from paying the tax on Capital Gains. However, the new purchase should be done either one year before or within two years of the sale and the construction should be completed within three years from the date of the transfer. The new property bought or constructed should not be sold within three years from the date of its purchase or the date of completion of construction.
• Capital Gain Account Scheme: - Through the Capital Gain Account Scheme (CGAS), you can save the received money in the designated banks. CGAS helps you in buying time to look for suitable investments as it serves to inform the Income Tax department that you plan to invest the money received, albeit at a later date.
• Invest in Bonds: - You can also invest in financial assets or bonds to save tax. Such bonds are issued by the Rural Electrification Corporation and the National Highway Authority of India and should be bought within six months of transferring the property. You can invest a maximum of Rs. 50 lakhs through these bonds.

If the house is held for a period of less than three years prior to its sale, it is termed as a short-term capital asset and any gain arising from such a sale is treated as a Short-Term Capital Gain. There are no tax exemptions for short-term capital gains and one needs to pay it according to the applicable tax slab.

However, if the property is sold after holding it for a period of more than three years, it is treated as a long-term capital asset and the gain arising from it is called the Long-Term Capital Gain. Such gains attract a flat or basic exemption rate of 20%.

Property is considered as a capital asset and Capital Gains Tax is levied on the gains arising from the sale of property. Such gains are calculated after duly adjusting the inflation rate, transfer and renovation charges.

Yes. Generally, the stamp duty on the gift deed ranges from 5% to 12% in all states. In few states like Haryana, Rajasthan and Delhi, a concession of 1% to 2 % has been provided to female transferors.

Stamp Duty is the tax paid for the legal recognition of property. It is paid by the home buyers. You can claim tax incentives of up to Rs. 1.5 lakh on stamp duty and registration charges on a new property purchase or construction of a house. However, these benefits are available with respect to one self-occupied property only.

A summary of the charges is as follows:-

• TDS - 1% on immovable properties (except agricultural land) exceeding Rs. 50 lakhs.
• Stamp Duty - Depending upon the various individual state and municipal laws
• Service Tax - - It is a central tax paid for the services offered by the developer to you. From April 1, 2015 onwards, if the apartment is worth less than Rs. 1 crore, or has a floor area of less than 2,000 sq ft, the service charge is levied @14% on car parking and preferential location charges (PLC) and @3.50% on the basic sale price. If the apartment is worth over Rs. 1 crore, or has a floor area greater than 2,000 sq ft, the service tax is levied @14% on car parking and preferential location charges (PLC) and @ 4.2% on the basic sale price of the flat.

The buyer needs to pay the following taxes:-

• TDS or tax deduction at source on an amount exceeding Rs. 50 lakhs for the purchase of property, excluding agricultural land.
• Stamp duty
• Service Tax - Applicable if the property is being purchased from the builder who conceived and constructed the project before offering possession to the buyer. If a `ready to move in’ property is purchased from the seller, service tax is not applicable.
• Value Added Tax (VAT) - If applicable in the concerned state.

The property could be converted from leasehold to freehold if the local laws permit the same. To cite just one example, properties under DDA can be converted to freehold by executing a Conveyance Deed but the same is not allowed if the property is owned by the Noida Authority.

The difference between a leasehold property and a freehold property lies in its ownership. In a leasehold property, the ownership remains with the concerned local authority or the government (as the case may be). The lease period varies typically between 30 to 99 years. However, this does not prevent the individual owner from selling or performing other transactions with the property, provided the lease deed has been registered.

In case of a freehold property, the owner of the property is the legal owner and can sell/lease/rent the property as per his/her discretion.

The language of the registration document must be the one that is commonly / prominently used in your district. According to Section 19 of the Indian Registration Act, the Registering Officer or the Registrar has the discretionary authority to decline the registration of your document if it is presented in a language which is not commonly used in the district, unless and until it is accompanied with the authentic translation of the language in use.

Yes, you can execute a Special Power Of Attorney to get your property registered by someone else.

A Power of Attorney allows a person to grant another person the right to make decisions regarding the person’s assets, finances and real estate properties.

There are two types of power of attorney. First, the ‘General Power of Attorney’ where a property owner confers ‘general’ rights. The rights include but are not limited to sell, lease, sub-lease etc. The second one is the ‘Special Power of Attorney’ wherein only a specific right is given by the owner to the chosen person.

Registration of a property includes necessary stamping and paying of registration charges for a sale deed and getting it recorded at the sub-registrar's office of the concerned jurisdictional area. If a property is purchased from a developer directly, getting it registered amounts to an act of legal conveyance. In case the purchased property is a second or third transaction, it involves a duly stamped and registered transfer deed. Nowadays, property registration process has been completely computerized in most states.

It refers to the registering of documents relating to transfer, sale, lease or any other form of disposal of an immovable property. Registration is compulsory by law for all properties under Section 17 of the Indian Registrations Act, 1908. Once a property has been registered lawfully, it means that the person in whose favour the property has been registered, is the lawful owner of the premises and is fully responsible for it in all respects.

• Original copies of the chain of title agreements and Building Plan approvals
• Original registration and stamp duty receipts
• Possession Letter
• Original share certificate (In case of societies)
• Proof of payment of all dues like maintenance charges, electricity bills, phone, water and property taxes up to the date of handing possession
• NOC from the Society or any other concerned body confirming that there is no objection to the transfer

• Project approvals can be verified from the corporation or the sanctioning authority’s office
• Ownership documents can be confirmed from the Sub Registrar’s office wherein they are registered
• Share certificates related to societies can be verified from the concerned society itself

Clear and marketable Title, Sale Deed, Encumbrance Certificate, latest tax receipts, Occupancy Certificate, Building Plan Approvals and Possession Certificate.

New Sale Deed, PAN Card and photographs.

Sale Deed, No Objection Certificate (NOC) from builder, NOC from banks, Building Plan approvals, Completion Certificate, PAN Card and photographs.

Allotment papers of the plot, Building Plan approvals, Transfer Deed (in case of multiple owners), Sale Deed, PAN Card and photographs.

• Sale Deed
• Title Deed
• Approved Building plans
• Completion Certificate (For Newly constructed property)
• Commencement Certificate (For Under-construction property)
• Conversion Certificate( If agricultural land is converted to non-agricultural)
• Khata Certificate (especially in Bengaluru)
• Encumbrance Certificate
• Latest Tax Receipts
• Occupancy Certificate

Yes. FIR is compulsory in cases where insurance is claimed for malicious damages, riots, terrorism, burglary, theft and larceny. In case of a fire incident, you need to submit the assessment report compiled by the fire department as well.

Property valuation is done by multiplying the built up area of the property with the cost of construction per square feet. This is the usual method followed by most banks.

It varies from bank to bank. Generally, most policies cover a period of five years.

Under personal possessions, home insurance companies generally cover furniture, electronic/electrical gadgets and jewellery under personal possessions. However, the maximum liability of these items depends upon the type of insurance cover sought or valuations done by the bank.

Home insurance policies cover the house structure as well as its contents or possessions. Many insurance policies also combine various personal insurance features too.

Home insurance is a type of insurance policy that covers private residences and protects them from unpredictable damages, natural or man-made disasters, burglary and theft.

Yes, lending institutions allow you to prepay your loan. However, these institutions may charge early repayment penalties, which may vary ranging from 2% to 3% of the outstanding principal amount.

It depends from one bank to another. Some banks ask for 1 or 2 guarantors.

It is generally advantageous to go for a home loan as it helps you in availing tax benefits. However, please consult your CA or tax advisor to discuss the pros and cons.

In a majority of the cases, the property to be purchased itself becomes the security and is mortgaged to the lender till the entire loan is repaid. A number of lenders may ask for additional security such as life insurance policies, fixed deposit receipts and savings certificates.

Yes, you can sell the property with the prior consent of the financing bank.

If the buyer wants to take a loan to buy the property, the process is much easier if he/she approaches the same bank. In these cases, the bank does not need to release the property papers to another bank before getting the payment.

If the buyer wants to make a payment outright, he can make it to the bank directly. The property papers will be released only after the bank has recovered the entire loan amount and other dues

Yes, a single woman can get a loan. Many lending institutions also have special schemes for them, such as a discount of up to 0.25% on the interest rate.

Generally, banking & finance institutions pay around 75% to 85% of the cost of the property bought. The remaining 20% of the amount is paid on an up-front basis, which is popularly known as the down payment.

On an average, loans are disbursed within 3-15 days after satisfactory and complete documentation and completion of all the required procedures.

Yes, you can get the benefit on both these loans. However, the total amount that you would be entitled to will not exceed Rs 1,50,000 for both the homes.

As per Section 80C of the Income Tax Act, you are allowed separate deductions on the principal and interest amount of the home loan amount, along with other entities like ULIP, PF, PPF, ELSS and NSC’s. In case of the principal amount, you can claim a deduction of upto Rs 1.5 lakhs while in case of interest, it is upto Rs. 2 lakhs. The amount of stamp duty and registration is also eligible for tax deduction.

It is important to note that the tax break can only be claimed for the year in which the construction of the property has been completed.

Home loans are usually accompanied by the following extra costs:

• Processing Charge: It is the fee payable to the lender upon applying for a loan. It is either a fixed amount not linked to the loan amount or a percentage of the loan amount.
• Pre-payment Penalty: When a loan is repaid before the scheduled duration, a penalty is charged by some banks, which is known as the pre-payment penalty.
• Miscellaneous Costs: Some lenders may also ask for documentation or consultation charges.

In the fixed interest rate scenario, the interest remains constant throughout the loan period irrespective of the changes in market conditions while in the floating interest rate scenario, the interest can decrease or increase depending on market fluctuations.

The interest on home loans is usually calculated either on monthly reducing or yearly reducing balance. In some cases, daily reducing method is also adopted.

Specifics are mentioned below:-

• Annual reducing method: In this system, the principal, for which you pay interest, reduces at the end of the year. Thus, you continue to pay interest on a certain portion of the principal that you have actually paid back to the lender. This means that the EMI for the monthly reducing system is effectively less than the annual reducing system.
• Monthly reducing method: In this system, the principal, for which you pay interest, reduces every month as you pay your EMI.
• Daily Reducing method: In this system, the principal, for which you pay interest, reduces from the day you pay your EMI. EMI in the daily reducing system is less than in the monthly reducing system

You would be required to submit the following documents:

• Proof of Identity: PAN, Driving license, Voter ID, Aadhar Card
• Proof of Income:
  • Salaried Applicants: Latest 3 Months salary slip showing all deductions and Form 16 for the last three years.
  • Self Employed Applicants: IT returns for the past 2 years and computation of income for the last 2 years as certified by a CA
• Bank Statement: Past 6 months
• Guarantor Form (Optional)

Apart from other criteria and norms of the lending bank, the home loan amount is generally calculated @ 30% to 65% of your gross income. You can increase your loan amount by including a co-applicant.

The general eligibility conditions are as follows:

• The borrower should be a resident of India or an NRI
• He / she should be above 24 years of age at the beginning of the loan
• He / she should be below 60 years (65 for self-employed) or at the retirement age when the loan matures

Yes. One can avail of a pre-approved loan from a housing financial institution or a bank.

Under the Pre-EMI option, the borrower is required to pay only the interest on the loan amount that will be disbursed as per the progress on the construction of the project. The actual EMI payment starts after the possession of the house.

EMI or Equated Monthly Instalment is a fixed amount paid by you to the bank on a specific date every month. The EMI’s are fixed when you borrow money from the bank as a loan. EMI’s are used to pay both interest and principal amount of a loan in a way that over a specific number of years, the loan amount is repaid to the bank alongwith interest.

Longer the tenure you have, the lesser will be your EMI but higher would be the interest outgo. In shorter tenures, you pay a greater EMI, but the loan gets repaid faster and you pay less by way of interest.

As home loans involve a large sum of money, the tenure generally varies between 3 to 30 years.

The banks usually offer the following types of loans on interest:

• Home Purchase Loan: It is the most common type of loan taken for purchasing a new residential property or an old house from its previous owner.
• Home Improvement Loan: Home improvement loans are given for executing repair and renovation work at home.
• Home Construction Loan: These loans are sanctioned to construct a house on a piece of land you have already purchased. The loan approval and application process for these loans is somewhat different from the other commonly available home loans.
• Home Extension Loan: Home extension loans are offered for expanding or extending an existing house. To cite a few examples, addition of an extra room, a floor etc.
• Land Purchase Loan: This type of loan is granted for the purchase of a plot of land for both residential or investment purposes.
• Home Conversion Loans: These loans are available for people who have already purchased a house by taking a home loan but would now want to buy and move to another house. With these loans, they can fund the purchase of the new house by transferring the current loan to the new house.
• Balance Transfer Loan: These loans are availed to transfer one’s home loan from one bank to another. It is usually done to repay the remaining amount of loan at lower interest rates or when a customer is unhappy with the services provided by his existing home loan provider and wants to switch to a different bank.
• NRI Home loans: These are specialized loans, structured to suit the requirements of NRI’s who wish to build or buy a home in India.
• Loan against Property (LAP): These loans are given or disbursed against the mortgage of a property.

Home loan is the money borrowed from a bank or a housing finance institution on interest for buying / constructing / upgrading a residential real estate property.

What we do is, before you choose the house you want to buy, we give you an in-principle approval based on your income and capacity to repay. This makes the entire process of identifying and buying a house easier and more flexible. You won't be under pressure to identify a house as you know how much funds the bank would make available to you.

SBI requires a mortgage of the property for which the loan is being taken. Where mortgage can't be provided, other tangible security would need to be provided. The title of the property should be clear, for which a certificate would be required from the Bank's approved advocate, safeguarding your interests as well as Bank's interests.

Additional security may be required where the house is under construction. This may be for an interim period, by way of tangible security or guarantees from sound and solvent individuals.

A buyer could ask you for the original Sale Deed, Title Deed, relevant tax receipts and an Encumbrance Certificate.

Only the buyer is required to pay the Stamp Duty.

Yes. However, the procedure and forms may vary from state to state depending upon the location of the property. Every state in India has formulated its own set of forms under the registration rules. These forms are required to be filled up and filed at the time of the registration of Sale Deed/Transfer Deed.

In the Income Tax Act under the clauses governing rules for a sale transaction, it is mandatory for the buyer and seller to provide their PAN card number and in the event of a sale, either the seller and/or the buyer would need to fill up Form 60 as presecribed under Income Tax Act.

If the buyer or the seller is a Non-Resident Indian (NRI) not assessed for taxes in India, the person would not need to file Form 60 under the Income Tax.

Yes. You can get it done at the sub-registrar's office of the concerned district.

The sale of a residential property is said to have been formalized if the seller has received the entire consideration amount, registration of the documents has been carried out and actual possession of the property has been granted to the buyer.

No. Tax benefits are available for NRI's only if you file your returns and subsequently become eligible to avail the tax benefits as mentioned under Home Loan FAQ's.

Apart from the documents mentioned under the home loan section for Indian citizens, NRI’s are required to submit a few additional documents as well. These include:

• A copy of a valid passport
• A copy of the work contract or the labour card
• The power of attorney (POA). (POA is required because the borrower is not based in India)

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 accounts change on the basis of RBI regulations.

Home loan offered to NRI’s do not exceed 5 years in major cases. However, some financial institutions offer loans for a term of 7 years as well. The repayment for the loan is done through monthly instalments (EMI), which usually begin after the entire loan amount has been disbursed. As regards cases which involve part disbursement, you need to pay simple interest at the interest rate applicable on the loan amount disbursed.

The eligibility is calculated in the same way as is done for resident Indians with a special emphasis on:

• Qualifications - Graduate (Minimum)
• Current job profile and work experience
• Chances of continuing abroad for the loan tenure
• Chances of servicing the loan with an extended tenure in case the applicant needs to return to India

To purchase a house which is either ready to move in, under construction or bought from another owner, an NRI is eligible to apply for home loans. Additionally, NRI’s can apply for home loans under the following scenarios:-

• For construction of a property on a plot of land by self
• To purchase a plot allotted by a society / development authority
• For the purpose of renovation or improvement of an existing property in India

In case of residential properties, the repatriation of sale proceeds is restricted to not more than two such properties, if the property was purchased from funds held in an NRE Account.

Additionally, the amount repatriated out of India should not exceed the amount paid for 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. The RBI has granted general permission for sale of property. However, wherein another foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in non-resident accounts maintained with banks in India.

Under the existing general permissions available, an NRI/PIO may purchase residential/commercial property in India out of the funds remitted to India through normal banking channels or through funds held in his NRE/FCNR (B)/NRO account. No consideration would be paid outside of India.

Upon receiving specific approval from the RBI, a person who is resident outside India may hold an immovable property in India acquired through inheritance from a person resident outside India, provided the owner had acquired such property in accordance with the rules and regulations of the foreign exchange law in force at the time of acquisition or under specific FEMA guidelines.

Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999.

Yes. Under the general RBI guidelines, NRI/PIO may acquire residential/commercial property by way of a gift from a person resident in India or an NRI or a PIO.

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

Yes.

No. An NRI or a PIO cannot buy a property in India jointly with a foreign citizen.

No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.

No. There is no limit placed on the number of residential properties that an NRI can buy in India.

No. NRI’s do not require any consent from the RBI to buy immovable property in India, provided the property is residential or commercial in nature.

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 course of the previous financial year (April-March) and who has come to or stays in India either for employment, business or for any other vocation.

PIO means an individual (not a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan), who at any time has held an Indian passport, or who or either of his parents or grandparents were a citizen of India according to the Indian Constitution or the Citizenship Act, 1955.

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 the purpose of employment, business or any other vocation, which would indicate his intention to stay outside India for an indefinite period of time. An Indian would also be termed as an NRI if his stay in India is less than 182 days.

When a person dies without leaving a will, the rules of succession (or inheritance) have to be followed to distribute the deceased person's property among his legal heirs. The rules of succession determine as to who are the rightful heirs of the deceased and what would be their share in the inheritance. Note: The term 'property' refers to immovable property, unless stated otherwise).

In India, the rules of succession differ between religions. Therefore, succession works differently for Hindus, Christians, Muslims, Jews and Parsis. However, the rules of Hindu succession are also applicable to Buddhists, Jains, Sikhs and any other person who is not a Muslim, Christian, Parsi or Jew by religion. (Note: The rules of succession detailed here apply specifically to Hindus, unless stated otherwise).

Property of all forms can be inherited by your legal heirs. This would include not only your own acquired property but also your share in the ancestral property of your family.

An ancestral property can be defined as a property acquired by your great grandfather which has been passed down from generation to generation (viz., your grandfather and father) up to the present generation (you) without being divided or partitioned by the family. Therefore, the property should be four generations old and should not have been divided or partitioned by the previous three generations for the property to qualify as your ancestral property.

Self acquired property is the property that you have purchased from your own income. As far as your self acquired property is concerned, you are free to dispose it off in any manner as per your discretion.

Your right to a share in your ancestral property is given to you by the mere fact of you being born. Your share in your ancestral property cannot be taken away. This is unlike other forms of inheritance, wherein inheritance opens only upon the death of the owner of the property. For example, your father may exclude you from the inheritance of his self acquired property. However, he is barred from doing this as far as your share in ancestral property is concerned.

The rights of the heirs in ancestral property are determined per stripes and not per capita. This essentially means that the share of each generation is first determined and the successive generations in turn subdivide what has been inherited by their respective predecessor.

Identifying a property that may form part of an inheritance as either self acquired or ancestral is crucial as the law treats both types of properties very differently. Identifying a property as either self acquired or ancestral will help you to plan as to how your estate would be inherited by your heirs. On the other hand, as a legal heir, this would also allow you to identify your rightful share in the family estate.

Once an ancestral property is divided, the share of each legal heir is his or her own self acquired property. Further, property inherited by either a will or a gift is not treated as an ancestral property. Moreover, self acquired property can become ancestral property if it is thrown into the pool of ancestral properties and enjoyed in common. It should also be kept in mind that properties inherited from your mother, grandmother, uncle and even your brother cannot be considered as ancestral properties.

{Illustration: Property gifted by a father to his son could not become ancestral property in the hands of the son simply due to the fact that he got it from his father}.

Your property would be inherited by what are known as Class-I heirs who are given priority under law such as your children. Each Class-I heir would get an equal share in the property. Therefore, if you leave behind your wife, two children and your mother, each one of them would get 1/4th share of your overall estate. If there are no Class-I heirs, then your estate would be divided among Class-II heirs. In the remote possibility that there are no Class-I or Class-II heirs, your estate would be divided between the distant blood relatives.

• Son
• Daughter
• Widow
• Mother
• Son of predeceased son
• Daughter of predeceased son
• Son of predeceased daughter
• Daughter of predeceased daughter
• Widow of predeceased son
• Son of predeceased son of a predeceased son
• Daughter of predeceased son of a predeceased son
• Widow of predeceased son of a predeceased son
• Son of predeceased daughter of a predeceased daughter
• Daughter of predeceased daughter of a predeceased daughter
• Daughter of predeceased son of a predeceased daughter
• Daughter of predeceased daughter of a predeceased son

• Father
• Son's daughter's son/daughter; Brother; Sister
• Daughter's son's son's/daughter; Daughter's daughter's son/daughter
• Brother's son; Sister's son; Brother's daughter; Sister's Daughter
• Father's father; Father's mother
• Father's widow; Brother's widow
• Father's brother; Father's sister
• Mother's Father; Mother's mother
• Mother's brother; Mother's sister

Initially, women were denied a share in an inheritance of property and the law gave preference to the sons. However, a daughter now has an equal right in the property left behind by their fathers. This however only applies to properties left behind after 2005. Therefore, if a person had passed away before 2005, the daughter cannot claim an equal share in the property. She is however entitled to a certain amount of maintenance if she is unmarried. At present, a daughter has the same right in the property of her father on par with a son.

A property left behind by a woman should be divided equally among her children and her husband. If a child had already passed away, then that child's share would be divided between his children. If there is no surviving spouse, child or grandchild, then the property should be divided between her parents. If her parents have also passed away, then the property would be divided between the heirs of her parents.

A person is disqualified from inheriting the property of a person he has murdered or helped to murder. Further, if children convert to another religion, then the grandchildren would be disqualified from the inheritance unless the grandchildren convert back to Hinduism.

If your son, grandson or brother has left behind a widow, then she would be able to claim a share in the property even if she has remarried.