Every person has a dream of owning a home. Buying a property is one of the most significant investments for anyone because all their hard-earned money is going to be put into it. Therefore, it also becomes necessary for the buyer to know the property registration process in India as it helps him gain legal rights over the property and avoid any disputes over the title of the property.
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Residential property registration
The process involves several steps:
Step 1: Verification of the Property Title
The verification process of documents of the property will be easy to carry out if the property is being bought from the secondary seller rather than the developer. Because due diligence would be easier as the first owner/secondary seller already has the property-related documents ready with him.
Step 2: Know about stamp duty
You will have to estimate the property’s value and pay the stamp duty charges accordingly.
Stamp duty is very similar to other taxes that are levied by the Government, only here it is collected for transactions that involve legal documents such as the sale deed, conveyance deed, and sale agreement.
In technical terms, stamp duty is a tax paid for any document through which any right or liability is intended to be created, extinguished, transferred, etc.
Only upon payment of stamp duty, the document becomes legal. Also, only after this, the document can be used as evidence in the court of law.
How is stamp duty calculated?
In India, the calculation of stamp duty is different for each state. It also depends on the document type for which the stamp duty has to be made.
Stamp duty will be levied according to the value mentioned in the documents which are only applicable for few documents like title deeds, pawns, lease, etc.
Also, for a few other documents like conveyance deed, partnership deed, agreement for sale, etc it will be levied based on the value mentioned in the document or the market value or whichever is higher.
When should you pay stamp duty?
Before executing or at the time of executing the deed, the stamp duty has to be paid which means you either pay the stamp duty before the day on which it is executed or on the day when you execute the deed.
How to pay stamp duty charges?
There are 3 ways to pay stamp duty:
- Physical stamp paper
This is the most traditional way of paying stamp duty fees. Here, you purchase non-judicial stamp paper from an authorized seller. Once purchased, the transaction details can be written/typed on the stamp paper.
Franking is a process where an authorized franking agent will put a stamp on your document implying that the stamp duty has been paid. Once you pay the stamp duty charges, a franking machine will be used to stamp the document (with a special adhesive stamp).
The government of India introduced E-stamping to avoid any fraudulent practices and to make stamping easy and convenient to most of the people.
To get e-stamping done, you will have to visit the Stock Holding Corporation of India Limited (SHCIL) website. You will need to fill up the application form and give it to the collection center along with the stamp duty charges. Once you are done paying the stamp duty, you will get the e-stamp certificate. This certificate will come with a unique certificate number (UIN) that will have the date of the issue.
Note: Not all states provide all the 3 options of stamping. So, according to the state you reside in and as per your convenience, you will have to choose which option is best for you.
Step 3: Pay the registration fee
Once you are done with the stamp duty work, you need to pay the registration charges before the registration of the property and the fees is generally 1% on the market value of the property.
Step 4: Submit the documents
You are required to submit the following documents at the sub-registrar office of your area.
- Identity and address proofs of both the buyer and the seller
- Proof of registration and stamp duty charges paid.
- Original sale deed
- NOC from the builder
Note: These documents are indicative and not absolute. They may vary from state to state.
Step 5: Completion of procedure
Once the submission of all the documents is completed, the documents will be verified by the authorities and will be duly attested by them. You can now collect the original documents while the sub-registrar office still retains one set of duplicate copies with them.
With this, the procedure completes.
And now that you know the complete process, it should be easy for you to register the house that you are planning to buy.
- What are the 3 ways by which I can settle stamp duty charges?
- Physical stamp paper – by buying non-judicial stamp paper from an authorized seller and then getting it written/typed about the transaction details on the stamp paper.
- Franking – an authorized franking agent will put a stamp on your document which is indicative of the stamp duty that has been paid. And once you pay the stamp duty charges, a franking machine will be used to stamp the document.
- E-stamping – you will have to visit the Stock Holding Corporation of India Limited (SHCIL) website and fill up the application form and give it to the collection center along with the stamp duty charges. Once you are done with paying the stamp duty charges, you will get the e-stamp certificate and this certificate will come with a unique certificate number (UIN) that will have the issue date.
- What are the documents that I need to submit to get my property registered?
- Proof of identity and address of both buyer and seller
- Proof of registration charges paid
- Proof of stamp duty fees paid
- Original sale deed
- No objection certificate from the builder