Tag Archives: Property Registration

All you need to know about the sale deed

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What are the steps in the process of buying a property?

Let’s first discuss the steps in buying a property. When purchasing a property, the first step is negotiating the price with the seller. To confirm the booking, you must pay an advance to the seller. A builder must first pay a 10% deposit and sign a booking form before purchasing a property. After the buyer and seller agree on terms, they sign a contract that includes a time period for payment (generally two to three months). But this is not a sale deed. It’s important to note the information, facts and details in a sale deed and here’s everything you need to know.

A sale is completed when the seller transfers ownership rights to the buyer. The deed of sale is drawn up and registered with a specific state authority, making it valid.

How is a Sale Deed Executed? – RoofandFloor Blog

What is Sale deed?

The deed of sale is a legal and final document transferring ownership of a property. It describes the terms of the sale and is signed by both the buyer and the seller. Depending on its purpose, a contract of sale may also be called a contract of sale or a contract of sale mortgage. A bill of sale is governed by the common law, the Contracts Act, the Transfer of Property Act, etc. It uses certain terms that are standard across all jurisdictions, but certain details relate more specifically to the Indian context such as consideration (usually the same as the amount paid).

Benefits of Sale deed:

  1. Protects Parties – A well drafted deed protects both the buyer and the seller by preventing ambiguity and minimizing legal risks.
  2. Defines The Area – Buyers find it helpful to specify the square footage and locations of properties on paper.
  3. A sale deed is a legal document that concludes a sale. It is enforceable by law.

Clauses / Elements in the Sale deed you should know:

The sale deed includes the following details:

  1. Details of the party – The details of the party include the names, ages, and addresses for both buyers and sellers.
  2. Details of the property – The location of the property, a description of the property, and construction details.
  3. Payment details – Payment details will show you the price of your property. It also lists the payment mode like a credit card (Visa, MasterCard, Discover) or direct transfer from a bank account.
  4. Handing over the original papers of the property and the possession details.
  5. No dues on the property – On the property, no dues, such as loans, tax, liability, and other dues.
  6. Indemnity clause –  An indemnity clause in a sale deed provides protection for the buyer’s interests. It is important to draft the document with care to avoid future disputes. Indemnity clauses under the sale deed seek compensation if there are any losses or expenses in the future.

What is the process for executing a Sale deed?

  1. Draft sale deed – To execute a sale deed, you need to first draft a sale deed. This document records all of the property owner’s rights, duties, and interests in the property. This includes encumbrances, liens, loans, taxes, mortgages and deeds for neighboring properties if they do not belong to the same legal entity.
  2. Pay Stamp Duty – Stamp duty is a tax paid to the Indian government on the sale of real estate. It is usually paid by the buyer and varies from state to state. For more details see our detailed video on stamp duty.
  3. Signed – Both buyer and seller must sign the sales deed. This document ensures that they have both agreed to the terms of the sale transaction. The deed must be registered within four months of the date it was signed in order to be valid.
  4. Registered – A sale deed serves as both proof of ownership and an essential legal document required for taxation purposes. It is an affidavit signed by both the seller and buyer. This is submitted to the revenue department when registering property under several tax laws. It must be registered within 4 months of signing the document. If this deadline is exceeded, you risk losing your right to purchase the property.
  5. The seller gives the original documents – The seller delivers the original documents and the buyer pays to execute the sale deed.

The following are the important, procedural, and legal terms you should know about sale deed if you are planning to sell your house.

Stamp duty and registration charges in India?

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Suppose a buyer and seller get into a sale and purchase of the property. For the sale deed, they must register it in India and pay stamp duty and registration charges.

What is Stamp Duty Refund Process when the Sales Deed is canceled? - Kotak Bank

Who collects Stamp duty and registration charges in India?  

  1. As per the Indian Stamp Act 1899 the state government collects Stamp Duty and not the central government. It is different in different states. The state government uses it for building the state’s infrastructure.
  2. Stamp Duty varies with the type of housing and the state in which it is located, and it also varies with the gender of the buyer, and senior citizens get a rebate on registration charges.

Benefits of Stamp duty

  1. Registering a stamp duty makes the sale deed a proper legal document and makes it possible to submit the deed to the court as evidence. In case the document is lost, a duplicate copy can be produced. The buyer has to pay stamp duty at the time of registration.
  2. The buyer generally pays Stamp Duty

Stamp duty in Real Estate?  

Stamp duty in Real estate is on Sale deed, Partition Deed, and Lease Deed. If a lease deed is more than 12 months, it must be registered and pay stamp duty, otherwise, generally, lease deeds are for 11 months. Therefore, which means the document of the property is verified by a notary declaring the authenticity of both parties signing the documents.

Delhi Stamp duty

  1. Delhi Stamp Duty charge has been going on since the year 1908, which is a retardation charge.
  2. Like in Delhi, stamp duty is 6% if a property is registered in a Male’s name, 4% if in a female’s name, and 5% if in joint name. This is in case the property value is less than 10 lakh rupees. But if it is more than 10 lakhs rupees, both males and females pay equal stamp duty.
  3. The Registration charge is 1% of the property value.
OwnerStamp Duty
Male6%
Female4%
Joint (Male& Female)5%

How to pay Stamp duty?

The 3 methods to pay a stamp duty are as follows:

Method 1 –

Non-Judicial stamp paper. If stamp duty is 1 lakh, buy papers worth Rs 1 lakh. You will print the sale deed on stamp paper.

Method 2 –

Franking method – Print the sale deed on plain paper. Pay stamp duty in a cheque, cash, online, or dd draft. Then bank attests to the sale deed.

Method 3 –

E-Stamping – it will mention all details – generated online – Go to Stock holding corporation of India – www.shcilestamp.com. This will be paid at authorized centers. Collect e-stamp then.

Process of Property Registration

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We’ll discuss some of the main points on the entire process of registration of a property in India. Although this process is quite complex, it may require a lot of time and effort by the registry office to complete. So let’s start the process of registering a property in India with propertywala.

Karnataka Property Registration - Procedure and Charges - IndiaFilings

STEPS OF PROPERTY REGISTRATION IN INDIA:

  1. The first step is to choose the property and look for all the details in the property. Negotiate with the seller. Pay 10% booking amount. Then we have an agreement to sell.
  2. Buyers should check that there are no liens or other encumbrances on the property before they make an offer.
  3. Calculate Stamp Duty. Stamp Duty is the tax levied on the transfer of real property in the state. Stamp duty rates vary from state to state. It’s calculated either on the circle rate or on the market rate, whichever is higher. It’s generally 3-10% of the property value and 1% is the registration charge.
  4. There are three methods for paying stamp duty, as follows:
    1. Method 1 – Non-Judicial stamp paper (picture). If stamp duty is Rs. 1 lakh, buy papers worth Rs 1 lakh, where sale deed will be printed on an official stamp paper.
    2. Method 2 – Franking method – Print the sale deed on plain paper. Pay stamp duty in the cheque, cash, online, or DD draft. Then the bank attests to the sale deed.
    3. Method 3 – E-Stamping (picture) – it will mention all details – generated online – Go to Stock holding corporation of India – www.shcilestamp.com. Payment will be made only at authorized centers. Collect e-stamp then.

HOW TO CALCULATE STAMP DUTY:

Now, buyers should also be aware of the Stamp duty calculation. They should also know that this tax is payable when they register their property.

For example, if the actual value is Rs. 40 lakhs and the circle rate is Rs. 50 lakhs, then you have to pay stamp duty at the highest rate out of the two. Hence, in this example, because the circle rate is greater than the actual rate then you have to pay a stamp duty of Rs. 50 lakhs.

And in another case, let’s assume that you bought a property in India with a market value of Rs 90 lakhs and the circle rate was Rs 80 lakhs. In this case, you would have to pay a stamp duty of Rs 90 lakhs. Therefore, you can calculate your stamp duty. In addition, you can also estimate stamp duty online because it varies differently and is higher in large cities and towns than in small towns or cities.

5. The next thing is a draft and print sale deed or conveyance deed, or gift deed. It mentions all details like name, address, age of both the buyer and seller, etc. It provides details about payment, including through cheque, cash, or any other method. After that, you have to print the sale deed on stamp paper and then sign each page of the sale deed. Two witnesses also have to sign the last page of the sale deed.

6. After drafting and printing the sale deed, you must register it at the sub-registrar office. The office should be located in a fixed zone of your property’s locality. To schedule an appointment online or to obtain a token number, contact the sub-registrar office by phone or in writing. Both buyer and seller should attend the registration; witnesses should be present as well. If either of them cannot attend, they must appoint someone to act on their behalf with power of attorney. All parties should bring documents such as an Aadhaar card and an identity document. Three photographs will be attached to the sale deed, and both buyers and sellers will be asked to sign their names in the presence of a sub-registrar. Fingerprints will also be taken for security purposes.

7. After that, you have to collect the registered sale deed. The deed can be collected within 15-20 days. If you took a bank loan, the bank will collect the original deed.

8. Now that the registration process is over and the property transfer is complete, you need to change the name in the land records. This process is called a mutation. If your property is located in a rural area or outside municipal limits, you will have to change the name in land records. The mutation has different names in different states. For example Jamabandi in Haryana, Punjab, and Rajasthan; Khatauni in Uttar Pradesh; 7/12 in Gujarat and Maharashtra; and Khatian in Orissa, West Bengal, and Bihar. After you register your property, the whole process of registration of your property is completed.

4 ways to legally save on property registration charges

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4 ways to legally save on property registration charges – Techtends

The property registration charge, which usually on average ranges between 5-10%, frequently eats up a substantial part of a home buyer’s budget. Buying a home is everyone’s dream but, with a lack of money, it is impossible to get a dream home. If you succeed in saving any part of the charge, it will save money and help in raising your home-buying budget. It will also boost your interior budget, reducing your home loan outstanding or utilizing it any other way you prefer. Below is the list of 4 ways to legally save on property registration charges.

By appealing to the registrar/sub-registrar, a way of legally saving on property registration charges:

Stamp duty and registration rates are to be calculated on the actual transaction price. When the market prices change at periodic intervals, the government keeps on revising the circle rate. This has happened many times in the recent past when the market rate was less than the circle rate. When the market rate is less and paying the stamp duty at a higher circle rate puts a buyer at loss. However, there is a way you can save on stamp duty because not many buyers are aware. Under the state stamp act, they can appeal to the sub-registrar for conviction of market value.

Registration at undivided share:

The purchase of undivided shares is widespread in the land aggregation process. When the buyer signs two agreements with the builder – the sale agreement and the construction agreement. The sale agreement is for undivided shares (UDS) in property, i.e. the buyer’s share only in the common area. A specified share would be required to be crystalized by going for metes and bound partition for any utilization. Hence, the registration of a construction agreement is not compulsory in every state; it is only possible where the agreement is not compulsory. In some states such as Tamil Nadu, it is mandatory to register both a sale agreement and a construction agreement.

Rebate for female buyers:

If joint/individual purchases by women, many states, including Haryana, Delhi, Punjab, Rajasthan, and UP offer a discount on stamp duty charges. The Delhi government’s official website states, the stamp duty rate is 4% for women and 6% for male buyers.

Local stamp act:

Although rules vary from state to state, it’s reproving to review the local stamp act / hire a professional to do the job. The cost of the property can occasionally be reduced by state regulations, which sometimes, state rules are such that you can save on property registration charges.

In Maharashtra, most clients don’t know if they sell the property within one year of buying from a developer, the property registration charges are applicable only to the net profit. On the property, if gifted to a blood relative, no need to pay stamp duty. For Example, Maharashtra, Punjab, and Uttar Pradesh.