Agenda

• Intro
• Legal
• Loan
• Taxation
• Vastu

Introduction

Types of real estate:

• Residential
  • Empty plot
  • House
  • Flat
• Commercial
  • Shop
  • Offices
• Industrial
• Agricultural

Legal Aspects of REs

By Naman Mohnot

10 property documents we should know

1. Title document (Sale deed, gift deed, etc)
   1. The main registry paper with stamp on front page.
   2. Before sale deed there is another document called Agreement to Sale. This like engagement, sale deed is like marriage.
   3. Check how the seller got this property. Check the title document there.
2. Channel document
   1. This is a document which contains the history of all the owenership changes of the property.
   2. This is mandatory before buying a property.
3. Encumbrance certificate
   1. It is an evidence that the poperty is free from all legal and monetary liabilities.
   2. This can be get from the Tehsil office with form-15.
4. Occupancy certifcate
   1. This is need to be chcked when we get property from a builder.
   2. This is relevant for flat.
5. Allotment letter
   1. When we are getting flat from builder this is required.
6. Tax receipts
   1. property tax receipts should be checked to know that the previous owner has paid all the taxes before.
7. Car allotment letter
   1. Letter indicating the allotment of parking space in apartments.
8. NOC
   1. ReRA provides this certificate.
9. Mutation
   1. The official document that the property ownership has been changed from the previous owner to yourself.
   2. Go to govt office and change the ownership and get this mutation letter by showing the sale deed.
10. Conversion certificate
    1. Converting a land to agricultural to non-agricultural purpose i.e. residential or commercial.

Property Frauds

1. Title Fraud

• When the property has co-owners and we have not got approval from the co-owner.
• If a father has been deceased and he has 2 children. 1 son and 1 daughter. Even if the son alone can not sell the property alone, we need the approval from the daughter as well.

2. Power of Attorney Fraud

• Never buy a property with power of attorney.

3. Possession Fraud

• Make the physical verfication before buying a property.

Preventive Measures

• Engage a Lawyer to create search report to verify the property's title is clear.
• Physically visit the property.
• If there is confusion over property shares then a suit for parition in civil court can legally determine and demarcate the ownership parts.
• Consult with neighbours and verify the seller's background to ensure that there is no dispute.

On the day of Registry

1. Carefully read the sale deed
2. Make naksha mauka of the property
3. Title document
4. Stamp duty
5. Encumbrance certificate
6. Possession
7. Witnesses

Home Loans

By Mandeep Gill

• In the initial years on every EMI we pay more interest and less principal, which gets reversed towards the end of the loan tenure.
• Therefore, Pay extra on the first half of the loan tenure to pay less amount of interest on the loan.
• Home loan insurance: It is not mandatory. It should be considered as life insurance as the sum assured value decreases as the loan amount to be paid reduces.

Home Loan Rule

1. Total House Cost <= Three years' of household income.
2. Miximum loan tenure < 20 years.
3. Total EMIs < 30% of household income.
4. Minimum downpayment is 40%.

RBI Guidelines

1. Bank will provide option to switch to a fixed-rate loan policy at the time of loan interest reset.
   

Taxation Aspects

• In STCG the gain will be taxed as per the income tax slab.
• In LTCG the gain will be taxed flat 20%.
• If a son inherits property from his father and sell it within 30 days of inheritance. The father's ownership tenure will be counted to check for capital gain tax.

Capital gain computation

• Net consideration = Sales consideration - Expenditure in respect to transfer (Brokerage)
• In Short term:
  • Capital Gain = Net consideration - Cost of Acquisition (Builder cost) - Cost of improvement (Short term)
• In Long term:
  • Capital Gain = Net consideration - Indexed cost of acquisition - Indexed cost of improvement (Long term)
• State govt decided circle rate will be used to determine the capital gain.

Saving CG Tax

There are two ways CG tax can be reduced:

1. By reinvesting the capital gain only into a new property

1. Section 54
   1. There is no additional tax benefit in complete use of the sale value on the new property.
   2. Only investing the CG is enough.
   3. If 60L property sold as 1cr. You need to only invest 40L in new property to save CG tax.
2. Section 54F
   1. You can invest CG and full sale deed accumulated over on any non-residential property like Stocks to buy residential property to save the CG tax.
3. There is some time limit on this. One year before and two year after the sale deed.

Capping on maximum investments

There are two kinds of capping is there:

1. Number of properties
   1. If CG > 2cr after selling one house, we can take maximum two houses.
2. Value of property
   1. No CG exemption after 10cr of capital gain.
   2. This has an indirect effect on 33.29 Why have the rents gone up massively over the last 1-2 years?.

2. By reinvesting into infra bond

1. Take bond till 50 lakhs within 6 months of the sale.
2. This has 5% annual interest.
3. Lock-in of 5 years.
4. Maximum 50 lakhs in a FY we can buy.
5. After 5 years no tax.

Tax saving on home loan

• 80c deduction in stamp duty payment.
• Deduction towards principal repayment
• Deduction towards interest
• Co-applicant effect -> If both partners paying EMI, both will get deduction.
• House/Flat/Land under construction -> No benefit

GST on property

• Builder is liable to collect GST separately for under-construction properties.
• Not the case for already constructed property. There the price is already included in the price.
• If rental income in an FY is more than 20 lakhs then we have to pay GST.
• No GST on residential but in commercial property.
• Rental income is taxable at slab rate.
  • 30% standard deduction is there.

Vaastu aspects

By Pradeep Jain

• House 4, 10 and 11 is for property buying.
  • 4: Bhumi, Bhawan, Maata, Vaahan
  • 10: Karm, Pitaa
  • 11: Ichha Poorti, Laabh
• If all these three houses have more than 28 points each then there is a good chance of buying property.

This is the kundli of Mukesh Ambani.

Do not purchase land/house near:

1. School
2. Graveyard
3. Hospital and
4. Temple

Five points to pay attention on house/flat

1. Entrance

Green and yellow are good. Orange is ok.
Red is bad to make entrance to home.

2. Bed rooms

3. Kitchen

4. Drawing room

5. Toilets

Source

• https://learn.lpt.institute/s/courses/625024040cf295f4ec9a9321/take

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