Congratulations! you have made the decision to buy a resale flat by investing your life’s savings.
In the case of a property being bought from a builder, the registration process is typically guided by the builder’s legal team. But if one is buying a resale flat, at a lot of times seller or buyer aren’t well versed with the documents that are needed or how the whole process works. As part of this post, we are trying to give an overall picture of the process and different aspects of buying a flat as well as key things to know as a buyer.
1. Property Documents:
As soon as you finalize a property based on your requirements and growth aspects, it is prudent on buyer’s part to collect the following documents from seller for verification.
- Mother Deed
- Sale Deed
- Encumbrance certificate
- Tax Paid receipt
- Khata certificate & Extract
- Occupation Certificate
- Aadhar & PAN
2. Property Verification
Verify above-listed documents from a real estate lawyer. This is to ascertain the legal ownership of the property, tax liabilities with the property and to ensure that it is complying with the various regulations.
If you are opting home loan, your bank might verifies the documents
3. Sale Agreement
Property Sale Agreement is probably the most important document in the whole chain because even sale deed is executed based on terms covered under sale agreement as well as is legally binding. Sale agreement covers various aspects of the sale such as Indemnity Clauses, agreed cost, advance paid, Penalty clause, Right to call-off the deal, the procedure to be followed in case of default by either party, losses or obligations to be covered by buyer or seller etc. In case the agreement is not well drafted, it may allow one of the parties to breach the agreement and still get away with it.
Since even sale deed is executed based on terms & conditions agreed upon in the sale agreement; hence it is all the more important to have an expert drafted and thoroughly vetted sale agreement.
Below is the image of sale agreement draft
Seller and buyer signs all the pages of sale agreement. Two witnesses signs at last page of sale agreement.
4. Sale Agreement Franking
If you are opting home loan to finance your property purchase, the sale agreement should be franked in sub-registrar office, the franking cost is 0.1% of buying price or guidance value, whichever is higher.
(Guidance value is the minimum amount for which a property can be registered hence property would not be registered lower than the guidance value fixed by department of stamp & registration of your locality.)
Franked sale agreement looks like below image
5.Home Loan
Home loan process can be triggered with the bank. The first step in securing a home loan is to get the loan sanctioned for which bank would need to look at the income proofs, property marketability and the credit score of the buyer including security or guarantor documents (some of this might be bank specific). The cheque or DD of the loan amount is issued in name of seller and once the property is registered original copies would be deposited with bank including registered sale deed.
6. TDS (Tax Deducted at Source):
Who Pays TDS: As per the government regulation, the buyer responsible to deduct the TDS and not the seller. If the buyer does not discharge the duty of TDS payment, buyer can be penalized for non-payment.
TDS rate: 1% TDS is applicable if buying price or guidance value is more than Rs. 50 Lakhs, whichever is higher. TDS is applicable for residential property, commercial property and land. But this does not include agricultural land.
TDS for NRIs is different because the government deducts capital gains and TDS for the NRIs. Below is the TDS rate for NRIs
When to pay TDS: Buyer needs to pay TDS on or before registering the sale deed, as the registering officer verifies the TDS challan before proceeding sale deed registration, also It is important to mention TDS Challan number in sale deed.
Details required to pay TDS: The buyer does not require a TAN. When filling the Form 26QB, submit the names, addresses, PAN, phone number and email id of both the buyer and the seller.
Submit the complete address of schedule property (to be purchased), the date of the agreement, the date of the payment, and the buying price. Make TDS payments online via net banking or physically at the bank. If there is more than one buyer or seller, need to furnish the details of each party in Form 26QB
Here is the step-by-step procedure to pay TDS Online:
Open the website e-Filing Home Page, Income Tax Department, Government of India
The login page looks like below image. Log in using your PAN Number (Your PAN Number is your user ID)
In the menu: click on e-File and click on e-Pay Tax in dropdown. Refer to below image
In e-Pay Tax: Click on + New Payment. refer to the marking in below image
In 26 QB (TDS on Sale of Property): Click on Proceed. Refer to the marking in below image
26QB has four pages, they are
- Buyer Detail
- Seller Details
- Property Transferred Details
- Payment Details
Below, we explained each page systematically
1 Buyer Details:
- Residential Status of Seller
- If seller is an India Citizen, Select Resident
- If seller is an NRI, Select Non-Resident
- Your Pan Number, name, address and contact number pop up automatically (or enter the incomplete info). Refer to below image
- Whether more than one Buyer: Select Yes if more than one Buyer or Select No
Click on Continue
2. Seller Details: Enter the following information of seller’s
- PAN Number
- Aadhaar Number
- Name
- Address
- Mobile Number
- Email ID
- Whether more than one Seller: Select Yes if more than one seller or Select No
Refer to below image
3. Property Transferred Details:
- Type of property: I am buying a flat in Apartment so I selected Building (Shops, Apartments, Flats, Bungalows, etc.) or select Land
- Address: Enter the property address you are buying
- Date of Agreement/Booking: Select the date of sale agreement signed or select the date of token advance or down payment made
- Total Value of Consideration (Property Value): Enter the buying price
- Date of Payment/ Credit made to Seller: Seller the date of your final payment to the seller (If you obtained the home loan, select the date mentioned in Bank’s cheque. Date should be present date or past date. Cannot be future date)
- Payment type: Select Lumpsum if you made the payment to seller in one single payment or select Installment
- Whether it is last installment: Select Yes
- Whether stamp duty value is higher than sale consideration? : Select No if your buying price is more than government value or guidance value of a property or Select Yes (Usually buying price is more than Government value so I selected No, you can check the government value of a property in your area sub-registrar office)
- Amount paid/credited currently: Type your buying price
- Total stamp duty value of the property: Type the stamp duty value of the property (In Bangalore, the stamp duty to register a flat is 5.1% of buying price so I typed Rs.2,65,200 which is 5.1% of Rs. 52,00,000)
Refer to the below-filled image
Click on Continue
4. Payment Details
We have options to pay through Net banking, Debit Card, Pay at Bank Counter, RTGS/NEFT. Refer to below image
Below is the image of the payment page
After the payment, the page directs you to download the TDS Challan. The TDS Challan looks like below image
This completes the procedure to pay TDS for property purchases.
7. Registration of Sale Deed
The sale deed is an instrument in writing which transfers the ownership of the property. Registration of the property is the final step in the process as registration implies that the buyer (in whose name property is registered) is the lawful owner of the property with all rights, obligations, and duties towards the same. The objective of registration is to prevent fraud and dispute at the same time maintaining public records for the same. The immovable property can be registered at sub-registrar’s office within whose jurisdiction the property falls.
The stamp duty is levied on the value of buying price or guidance value, whichever is higher. Below is the total government charge for resale flat
- Stamp Duty: 5.1% of buying price or guidance value, whichever is higher
- Registration: 1% of buying price or guidance value, whichever is higher
- Cess: 0.5% of buying price or guidance value, whichever is higher
- Scanning: Rs. 750 (approx)
Please note that 0.1% stamp duty paid for sale agreement franking shall be adjusted at the time of registration of sale deed in stamp duty, provided you bring the original sale agreement to the sub-registrar office (you would need to get it from your banker in case of home loan availed). This process is called DENOTE process and is not applicable in assignment / swapping cases.
All the government charges are paid on K2 website and generate K2 challan
Things to carry to sub-registrar’s office for sale deed registration:
- Mother Deed
- Seller’s sale deed
- Encumbrance Certificate
- Tax paid receipt (Current financial year)
- Khata
- Occupation certificate
- Sale Agreement
- Printed sale deed to register now
- TDS Challan
- K2 challan
- Aadhar and PAN (Seller & Buyer)
- Active mobile phone for OTP Authentication
- Two Witnesses
- DD or Cheque (final settlement to seller)
- Property key
8. MODT: (Memorandum of Deposit of Title Deed)
Memorandum of Deposit of Title Deed or MODT is applicable for all home loan borrowers.
It is essentially an undertaking given by you that you are depositing title documents of the property with the bank at your own free will in return for a loan.
Following are title documents deposited in bank under MODT
- Mother deed
- Sale deed
- Sale Agreement
- Encumbrance certificate
- Tax paid receipt
- Khata
- Occupation certificate
- and additional documents applicable for land like RTC, layout plan, building plan, etc.
After MODT registration, bank’s name reflects in encumbrance certificate. In the below encumbrance certificate, we encircled the bank details for your reference.
Irrespective of MODT is registered or not, bank collects all the title documents, which include sale deed, sale agreement, and latest encumbrance certificate.
Below are the government charges for MODT registration
- Stamp duty: 0.2% of loan sanctioned amount
- Registration: 0.1% of loan sanctioned amount
- Scanning Rs. 350 (approx.)
You and bank’s representative presence are mandatory for MODT registration in sub-registrar office.
Usually, MODT is registered immediately after the sale deed registration in same sub-registrar office.
The registered MODT looks like below image:
Note: After the sale deed registration, it’s important to change the name in khata, property tax and utility bill, in order to do so you need photo copy of title documents, hence before you hand over the tile documents to bank, take the scan copy of mother deed, sale deed and seller’s khata.
This completes the procedure to buy resale flat in Bangalore.
In Bangalore. we provide end-to-end assistance to buy resale property. To opt for our service, please write to us pgnproperties@gmail.com or WhatsApp to + 9 1 – 9 7 4 2 4 7 9 0 2 0 .
Thank you for reading…
