House in Mumbai: Ownership or Rent?

Is it better to rent a home or own a home in Mumbai? Let us find out:
Owning your own home provides a sense of security, builds equity, provides stability and is an asset you can fall back on in times of need
As the average age of a home buyer keeps reducing, it would seem easier to buy property at present, because of value for money prices and tax benefits that comes when purchasing your own home.
APPRECIATION
International trends suggest that real estate gives an 8-10 per cent annual return. Therefore, appreciation is guaranteed over a period of time.
ALTERING, MAINTENANCE
Owning your own home gives you a free hand to make alterations In the property. You are also not dependent on the landlord id maintain the property.
HOME LOANS
The rate of mortgage interests ie., the interest charged by the housing finance company on home loans is still at affordable levels.
INCOME TAX
The Income Tax Act provides for deduction on interest payable on capital borrowed for acquisition or construction of a property. For most of m such tax concessions make sense to own a home by availing a housing loan.
RENT vs OWN
House rent is usually about 20-25 percent of your monthly income as compared to the 35-40 per cent that goes towards EMI. However, the annual tax saving on EMI means that the actual figure comes down to roughly 30 percent of your monthly income

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New flats in Mumbai: Documents Needed

New house in Mumbai; are you interested in buying it? If yes, here are the documents to buy a new flat in Mumbai:

Firstly; the buyer has to enter into a Registered Agreement of Sale with the builder and pay the required margin money. Then he has to approach the financial institution and collect the necessary details including application form from them.
On application, copy of registered agreement, registration receipt, receipt of payments made and NOC from Builder have to be handed over to the financial institution.
In case of purchase of a new flat, loan will be disbursed in installments depending on stagewise progress of work-
Supporting documents to buy new house in Mumbai

Requirements for salaried applicants:
1. Employer's salary certificate in the appropriate format and latest salary slip
2. Photo Identity
3. 3TDS certificates, ESIC/PPF certificate
Requirements for businessmen and self employed people
► 3 years IT returns together with P/L account, etc duly certified by a Chartered Accountant.

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Buying an Under Construction flat in Mumbai

If you are buying an under construction flat in Mumbai or investing in property that is under construction, here are some things that you should take note of:

• Verify the approved plan of the building, along with the number of sanctioned floors. Verify whether the floor on which you are buying a home on is approved. Whether the land on which the builder is building is his; or whether he has undertaken an agreemenr with a landlord- If so. Check the titke of the land ownership with the help of an advocate.

• •Check the building byelaws as applicable in that area and ensure that the builder is building without any violation of front setback, side setbacks, height, arc

• Check if the specifications given in the agreement to sell of the sale brochure match the ground reality or not.

•  In locations where Urban Land Ceiling (ULC) NOC is applicable, check whether the same has been obtained.

•  Whether an NOC from water, electricity and lift authorities have been obtained.

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Documents Needed before buying Flat in Mumbai

Let us look at documents needed to submit  buying house or property in Mumbai or anywhere in India:
IF you want to purchase a flat in Mumbai, you have to look at the approved layout plan, THE approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
When buying commercial or residential property you would need to check for the following information:
► Before you start on documents, you need to understand market trends; identify the exact property you want to buy and formulate the commercial terms.
► Market Trends Is all about prevalent rates of property in the vicinity and last known transactions, so you do not pay too much for your home.
► Identify the property you wish to purchase, from all aspects —funding, requirements in present day as also the future.
► Formulate commercial terms, put everything In writing as far as possible.
Distinguish between terms and conditions of the contract which are negotiable and those which are fixed — eg price, payment schedule, time of completion etc.

► 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.
► The Title of the Vendor to the property must be clear and marketable
» Finalize 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 paid for the property ie., 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 Oiling and Regulation Act (e) any other authority.
t If you require a loan for the home, ask for a pre-approval letter from the lending institution.
► Permanent Account Number of Vendor and Purchaser is necessary 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 along with documents of title in original from the Vendor of the property
► Change name of the holder of the property to the purchaser in the records of the society, electric supply company, Municipal Corporation. Index 11 etc.

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Stamp duty for house in Mumbai, Registration and Market Value

Let us understand the terms, stamp duty, registration and market value when you buy house in Mumbai.
MARKET Value means the price at which a property could be bought in the open market on the date of execution of such an instrument. The Stamp Duty is payable on the agreement value of the property or the market value, whichever is higher.
Stamp Duty is a tax. Similar to sales tax and income tax collected by the government, and must be paid in full and on lime. A stamp duty paid instrument/document is considered a proper and legal instrument/document.
The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary. Section 30 of Bombay Stamp Act, 1958 stares the liability for payment of stamp duty.
REGISTRATION

FORMALITIES: Formalities and forms may vary from State to State depending on where the property is situated.
Every State has its set forms under the Registration Rules that are required to be filled and filed along with and at the time of Registration of Sale Deed/Transfer deed.

TIME LIMIT FOR REGISTRATION:
The property agreement should be registered with the Sub-registrar of assurances under the provisions of the Indian Registration Act within fourmonths of the dare of its execution.

TAXATION ISSUES
Prom the point of view of taxation no special formalities are required for completing while buying the property. However, proper Agreement to Sale etc, must be done and the ownership and the title should be verified to ensure that one does not have a problem at a later stage in respect of such property.

PAN
Under the provisions of the Income Tax Act and Rules for a transaction of sale, ir is now compulsory for the purchaser and seller to give their Permanent Account Number and in the event of either the Seller and/ or the Purchaser would be required to fill Form 60 of the Income-Tax Rules,

CAPITAL GAINS TAX
For the purpose of Real Estate, the Long-term Capital gain would be only if you hold the property for more than three years, then it is subjected to tax @ 20 per cent only.
In case you sell the property in less than three years time then it would become short term Capital Cain and the same is required to be taxed at the prevailing tax schedule of the rate applicable to the assessee depending on Ms other incomes.

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