FAQ on Stamp duty and Registration procedures.
A Flat purchaser has to enter into an Agreement for Sale for the purchase of a flat. The said document duly stamped and registered gives the flat purchaser right title and claim to the flat purchased by him.
We have hereunder endeavored to explain and elaborate e few legal matters that are relevant to the person purchasing a flat.

1. Stamp Duty
Stamp duty is a pre-requisite condition, which has to be paid before taking possession of the flat. It is essential to pay the requisite stamp duty every time one purchases a new flat or even when it is transferred within the family.

(i) Stamp Duty for Flats
Present rates of stamp duty for residential premises in the city of Mumbai above Rs.5,00,000/- is Rs.8750/- plus 5%

(ii) Stamp Duty for Shops/ Galas/ Office Premises & Garage
The rate of Stamp Duty for Shops/Galas/Office Premises and Garage even if used for car parking is 5% in Mumbai.

If the authorities are demanding more stamp duty than the agreement value then a representation should be made to the authorities emphasizing the below mentioned points (as may be applicable)
1. Possession of the premises will be acquired at a later date. (10% reduction in the market value is normally given by the town planners if possession is not given to the purchaser at the time of execution of the agreement).
2. The duty has to be paid on Sq. Meter's built up area and not on super built up area.
3. If payments have been made in say 1995 and the agreement has been executed in 1998 then the market value of the year 1995 has to be taken as per the Principles Of Land Acquisition Act.
4. There are reductions in the market value if the size of the shop is big.
5. The area is lacking in infrastructural facilities.
6. There is a defect in the title of the property and therefore, market value will also be reduced.
7. The officer should be told to inspect the premises and then only the market value should be fixed.

(iii) Procedure for Stamp Duty
When the Flat-Purchaser is desirous of entering into an Agreement, he/she is been given the stamp duty amount which is calculated as per the Agreement Value or Market Value whichever is higher. Once the stamp duty amount is been given to the Flat-Purchasers they are been told to get the Pay-Order, which will be addressed in favor of "SUPERINTENDENT OF STAMPS, MUMBAI". The pay-order is given for franking of the agreement and later on the said agreement is duly filled and signed by the respective parties.

2. Compulsory Registration Of Documents Section 17 Of The Registration Act, 1908
This Act lays down different categories of documents for which registration is compulsory. The documents relating to the following transactions of immovable properties are required to be compulsorily registered:

Under Section 2(6) of the Registration Act, 1908 the term "immovable property" includes: "land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to any thing which is attached to the earth, but not standing timber, growing crops nor grass."
1. Instruments of gift of immovable property.
2. Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent.
3. Instruments which create or extinguish any right or title to or in an immovable property of a value of more than one hundred rupees.

Place for Presenting document for registration Section 28 of the Registration Act, 1908 states that all documents of which registration is compulsory if it relates to an immovable property as well as a few documents of which registration is optional should normally be presented for registration in the office of the Sub-Registrar within whose sub-district the whole or some portion of the property to which the document relates is situated.

(i) Registration Procedure
At the time of lodging a document for registration For registration of any instrument, the original document which should be printed on one side only along with two photocopies of the original have to be submitted to the Registering Officer. The copies are to be photocopied only on one side of the paper and there has to be a butter paper between the two photocopied papers. The registration procedure also requires the presence of two witnesses and the payment of the appropriate registration fees.

(ii) On Completion of Procedure
A receipt bearing a distinct serial number is issued. The following requirements for completing the registration are usually stated on the receipt:
1. Market Value of the property;
2. Income-tax clearance; i.e., N.O.C. under Section 269 UL (3) issued by the Appropriate Authority constituted under Chapter XX-C of the Income Tax Act, 1961 if the same is applicable;
3. Urban Land Ceiling declarations of the transferor/s and the transferee/s. Fees for registration of a document The State Government has been empowered to fix the fees for registration of the document.

(iii) Registration Fee
The registration fee at present fixed for registering documents relating to property transactions are approximately 1% of the market value or agreement value whichever is higher subject to Maximum of Rs.30,000/- [from 1-4-2003]. The registration fee for the following immovable property transactions is leviable on the market value of property on which stamp duty is charged:
1. Conveyance,
2. Exchange,
3. Gift,
4. Partition,
5. Transfer of Lease by way of Assignment,
6. Sale,
7. Power of Attorney given for consideration,
8. Authorization to the attorney to sell the property.

(iv) Person's Entitled
To present the document to the Registering Officer for Registration Section 32 of the Registration Act, 1908 deals with the provisions relating to the presenting of documents for registration by a person. Subject to certain exceptions, every document, which is to be registered under the provisions of the Act, should be presented at the proper registration office by:
1. The concerned person himself/herself, or
2. The representative or the agent of such a person duly authorized by a power of attorney duly authenticated in a manner as is stated in Section 33 of the Registration Act, 1908. Registration of a document compulsory under the provisions of The Maharashtra Ownership Flat Act, 1963 Registration is necessary under the provisions of this Act.

Section 4 (1) of THE MAHARASHTRA OWNERSHIP FLATS (Regulation of the promotion of construction, sale, management and transfer) ACT, 1963, it is laid down that, the agreement in respect of flats to be sold by the owner/ promoter/developer to the flat purchaser requires compulsorily to be registered under The Registration Act.

Under the provisions of THE MAHARASHTRA APARTMENTS' OWNERSHIP ACT, 1970 Registration is necessary under this Act. Under Section 13 of the aforesaid Act, it is necessary on the part of the owner/owners to execute a declaration with regard to description of the land on which the building and improvements are to be located, including the number of storeys, basements, number of each apartment, area of each apartment, number of rooms and immediate common area etc. along with a set of floor plans of the building showing the layout, location, and dimensions of the appurtenance and bearing the verified statement of an architect certifying that the same is an accurate copy of the floor plans of the building as filed with and approved by the local authority within whose jurisdiction the building is located. Section 13(3) of the said Act requires that in all registration offices a book called "Register of Declarations" and "Deed of Apartments" under The Maharashtra Apartment Ownership Act, 1970 and a relevant index, be in a particular form and should contain such particulars as the State Government may prescribe. Under Section 13(5) of the said Act, the Sub-Registrar or Registrar must register the declaration along with floor plans of the building and the Deed of Apartments in the Register of Declarations and Deed of Apartments under the said Act and shall also enter the particulars prescribed in the index kept under sub-section(3).
Necessity of registering a document if a person agrees to transfer his right, title or interest in a premises purchased from an owner / promoter / developer to another person before the society is formed It is advisable to get an agreement registered in these circumstances.
Necessity of Registration of an agreement to transfer a flat after the registration of a co-operative society After the registration of a co-operative society the purchasers of various premises become members and shareholders of such a society, and as such the members are thereby governed under the provisions of The Maharashtra Co operative SocietiesAct,1960.

(v) Consequences of Non-Registration of a document
According to Section 49(c) of the Act, if a document, of which registration is compulsory under Section 17 of Registration Act, has not been registered, it cannot be produced as evidence in a court of law.

(vi) Time
Time permitted for registration of a document Under Section 23 of the Act, subject to certain exceptions, any document other than a will has to be presented for registration within four months from the date of its execution.

(vii) Expiry of the prescribed time
If a document is not presented for registration within the prescribed time period of four months, and if in such a case the delay in presentation of the document does not exceed a subsequent period of four months, then the parties to the agreement can apply to the Registrar, who may direct that on payment of a fine not exceeding ten times the proper registration fees, such a document should be admitted for registration. Delay in Registration - provision for additional four months The practice followed in such an event is that the parties to the document execute a Deed of Confirmation confirming that the main deed is valid and binding upon them. By way of such a deed the transferor/s also confirm/s that he/they hold/s no right, title and interest in the property and the same is being transferred to the transferee/s. A copy of the main deed is annexed to this Deed of Confirmation. This is the only manner in which the lapse in registration can be rectified.

3. Deed of Cancellation
Deed of Cancellation, of a duly executed and registered document by mutual consent may arise in some circumstances. In that event, the Deed of Cancellation will also have to be registered. At the same time no document can be canceled unless all the parties to it have mutually agreed to the cancellation.

4. Deed of Rectification
Deed of Rectification, if the main document/agreement is registered, then in that event it is always necessary to register the Deed of Rectification too. Blanks, erasures or alterations in a document. They are permissible as per Section 20(1) of the Act, but the persons executing the document should attest with their signatures or initials such blanks, erasures or alterations. As per Section 20(2), while registering such a document, it is the duty of the Registering Officer to make a note of any such blank, erasure or alteration in the register.

5. The Procedure on admitting documents to registration
The Registering officer has to endorse the following particulars, namely:
1. The signature and admission of every person admitting the execution of the document in person or by his representative, assign or agent;
2. The signature and admission of every person examined in reference to such a document;
3. Any payment of money or delivery of goods made in the presence of the Registering Officer in reference to the execution of the document and any admission or receipt of consideration made in his presence in reference to such execution.

After completion of all formalities related to registration, such original documents are returned by post or by hand delivery only after the proper procedure for the preservation of the original document has been completed by the Registration Authorities.

6. Unclaimed documents
Section 85 of the Registration Act, 1908 states that all documents (other than Wills) remaining unclaimed in any registration office for a period exceeding two years may be destroyed.

7. Execution of documents outside India
A document relating to an immovable property can be executed out of India and later it can be presented for registration in India. As per Section 26 of The Registration Act, 1908 if a document purporting to have been executed by all or any of the parties out of India is presented for registration within the prescribed time, the Registering Officer may, on payment of proper registration fee, accept such document for registration if he is satisfied that:
1. The instrument was executed out of India.
2. The instrument has been presented for registration within four months after its arrival in India

8. Power of Attorney
A Power of Attorney is a document which empowers a specific person to act on behalf of the person who is executing the same. It also includes any document by which a person is authorized to appear and act on behalf of a person who is executing the power of attorney. A power of attorney may also be given by a person to another to appear before any Court, Tribunal or Authority or before a Co-operative Society or any Body or Association. Types of Power of Attorney There are two types of Power of Attorney, namely:
1. General Power of Attorney
This type of a Power of Attorney gives general powers to the person in whose favor the document is executed. The person who is given the powers is called a "Constituted Attorney" and he is authorized to perform all kinds of acts and to execute any document on behalf of the person who has so executed that document.

2. Special Power of Attorney
Such a Power of Attorney gives the person, power/s only for specified act/s or transactions. In this case the power has to be strictly adhered to and the Constituted Attorney cannot do anything for which he is not duly empowered by the Power of Attorney.

9. Necessity of Power of Attorney
It is generally executed when a person wants to authorize someone to carry out any activity pertaining to his property, which he would have undertaken if he would be personally capable of doing the same. It is an authorization, which confers powers akin to that of the Principal on the person for a temporary period of time. If a person wants to present a document for registration at the proper registration office and if, for some reason he cannot be present, he may do so through his representative who is duly authorized by a Power of Attorney, which is executed and authenticated in the prescribed manner.

10. Execution of Power of Attorney
If the principal at the time of its execution does not reside in India As per Section 33(c) of the Registration Act, 1908, if the principal, at the time of executing the Power of Attorney does not resides in India, then the Power of Attorney has to be executed before and authenticated by a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or a representative of the Central Government in the country where the principal resides.

11. Attestation of Power of Attorney
The Registrar or the Sub-Registrar or the Magistrate, must first satisfy himself that the Principal has voluntarily executed the Power of Attorney. Only after he is satisfied as regards the same, can he attest a Power of Attorney. If he is not satisfied as to the genuineness of the Power of Attorney, then he has the authority to get evidence as to the voluntary nature of the execution.

12. Persons who are being exempted from being present at the Registration office
As per Section 38 of the Registration Act, 1908, the following persons are exempted from attending the office of the Registrar for admitting any document:
1. Persons, who are physically incapacitated due to some infirmity and who will have to take too much of a risk or serious inconvenience in order to be present.
2. Persons who are in jail under civil or criminal process.
3. Persons who are exempt by law from making personal appearance in Court

Here we are offering some vital information for the NRIs. The following point and the preceding FAQ's shall be of vital.

1.Non-resident Indians holding Indian passport do not require any permission from RBI for acquiring Immovable Property for bonafide residential purposes as section 31 of FERA 1973 is not applicable to them.

2.Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of NRO Account or out of NRE Account or out of FCNR Account.

3.RBI has granted General Permission to Non-resident Indians holding Foreign Passport (i.e. Foreign Citizens of Indian Origin) to acquire, hold, transfer or dispose off by way of sale or inheritance immovable properties situated in India provided :

3.1The property is for the Purchaser's bonafide residential purpose.

3.2The purchase consideration is met either by remittance of funds from abroad through normal banking channels or out of NRE/FCNR Account or out of FCNR Special Deposit Account.
 

4.Foreign citizens of Indian origin are however required to declare the properties to RBI within a period of 90 days from the date of purchase in Form IPI 17. The following documents must be submitted along with the declaration.

4.1A certified copy of the purchase deed or a certificate from the Co-operative Housing Society or an Association of the apartment owners as an evidence of transfer / registration of the property in the declarant's name.

5.Certificate from the declarant's bankers in India evidencing receipt of inward remittance(s) in foreign exchange through normal banking channel or withdrawal of funds from the declarant's NRE/FCNR account/ FCNR Special Deposit Account and payment of consideration for the property out of those funds.

6.Where a Foreign Citizen of Indian origin wishes to acquire a property, out of funds held in NRO Account then the permission from RBI will be required which can be applied for in Form IPI 1.

7.Where a Foreign Citizen of Indian origin wishes to acquire a property from the sale proceeds of another property, prior permission of RBI is essential and may be obtained by applying in Form IPI 1.

8.Any number of properties can be acquired by non-resident Indians regardless of whether they are holding Indian passport provided they are required for bonafide residential purposes.
Under Section 29 of the Foreign Exchange Regulation Act 1973, the Reserve Bank of India has granted General Permission to Foreign Citizens of Indian origin and Indian citizens residing outside India to let out their immovable properties (Commercial / Residential).
The rental income or proceeds of any investments out of such income shall be repatriable outside India subject to Income tax being paid.

The Reserve Bank of India on an application in Form IPI I may consider favourably the acquisition of residential property by Foreign Nationals of Non-Indian origin provided:
1. The purchase consideration is met out of funds remitted from abroad.
2. The property is acquired for bonafide residential use.
3. The foreign National of Non-Indian origin undertakes not to repatriate the sale proceeds.