Buyer’s Guide

Loan Enquiries

Can I get my house financed?

Yes. All Starwing Developers properties offered for sales have clear titles. All Starwing Developers projects are approved with most leading banks and financial institution for availing home loans.

How much loan can I avail?

You can avail a maximum loan of 85% of the Agreement value. However your loan amount may differ as per your income eligibility as appraised by the bank. All loans are at the sole discretion of the bank.

What the term of the loan that the Bank offers?

Banks and financial institutions usually offer loans for a term of 15-20 years.

What are the basic documents required for Home Loan? Basic Document

  • Completed application form
  • Photograph
  • Photo Identity Proof
  • Residence Address Proof
  • Signature Verification Proof
  • Age Proof
  • Fee Cheque

For Salaried Applicants

  • Last 3 months’ Salary Slip
  • Form 16
  • Repayment Track record of existing loans/Loan closure letter
  • Bank Statement for the last 6 months from Salary Account

For Self Employed Applicants

  • A brief introduction of Business/Profession
  • Photo Identity Proof, Residence Address Proof, Signature
  • Verification Statement for all the main partners/directors
  • Repayment Track record of existing loans/Loan closure letter
  • Board Resolution in case of a company
  • Proof of existence of the company
  • Office Address Proof
  • Income Tax Return / Computation of Total Income / Auditors Report / Balance Sheet / Profit & Loss Account certified by Chartered Accountant for last 2 years (both for business and personal of partners/directors).

Stamp Duty and Registration

Stamp duty rates have been revised w.e.f April 2012 as under:-
For residential as well as commercial units the stamp duty payable is applicable @ 5% of market value of such unit or consideration paid under the agreement, whichever is higher.
The market value of the Unit is determined on the basis of stamp duty ready recknor issued by government every year on January 1st. Further registration fees is payable @ 1% of market value/consideration (whichever is higher) and is capped up to Rs. 30,000/-.

Service Tax

Service tax is applicable on under-construction flats since the flats are under construction; there is an element of ‘construction service’ in the agreement between builder/developer and purchaser. Hence, it attracts service tax. While service tax is charged at 12.36 per cent, in case of under construction flats, the effective rate works out to 3.09 per cent of the value of property. This is because service tax is not applicable on the entire purchase price. Since there is sale of goods elements, in addition to service, the tax is applicable on 25 per cent of the gross consideration.
For agreements entered towards construction of flats after March 2013, service tax is payable at 3.71 per cent per cent where the flats are above 2,000 sq ft or cost more than Rs 1 crore. Any charges towards additional facilities such as maintenance, car parking etc, would also attract service tax. A single residential unit is, however, exempt from service tax. This means that a single villa or a bungalow is exempt.

VAT

Currently, in Maharashtra, VAT @ 1% of the “Agreement Value” is payable at the time of registration of the “Sale Agreement”.
However, VAT is not payable in case of purchase of a property from the developer, after the construction is completed and completion certificate is received.

NRI/PIO Help

Who is an NRI?

An Indian Citizen who holds a valid Indian passport and stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident Indian (NRI). Non-resident foreign citizens of Indian Origin are treated at par with non-resident Indians (NRI).

Who is considered a person of Indian Origin (PIO) for investment in immovable properties?

A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal) is deemed to be of Indian origin if:

  • He held an Indian passport at any time,
  • He or his father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (Act No. 57 of 1955).

What is an OCB?

Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin residing outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of at least 60% by individuals of Indian nationality or origin resident outside India as also overseas trusts in which at least 60% of the beneficial interest is irrevocable held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs as long as the ownership/beneficial interest held in them by NRIs continues to be at least 60%.

What are the various facilities available to NRIS/OCB?

NRIs/OCBs are granted the following facilities:

  • Maintenance of bank accounts in India.
  • Investments in securities/shares of, and deposits with, Indian firms/companies.
  • Investments in immovable properties in India.

I am an NRI; Can I buy property in India?

If you are of Indian Origin and hold an Indian Passport, then you are entitled to buy property in India. If you are an overseas passport holder like a US Passport or a British Passport Holder, then you need to have a PIO Card. This can be applied for at the Indian Embassy or Consulate in your country where you are residing or you could enquire with them for further details. It is sufficient if you have your father’s or mother’s passport or birth certificate or any other proof of their being an Indian Citizen. It is essential to carry that proof with you.

How can I pay for the property purchased?

  • There is no restriction or condition on payment while buying property. Normal banking channels are applicable.
  • FCNR. Foreign Currency Non Resident account in India.
  • NRE. Non Resident (External) Rupee account in India.
  • Remittance from abroad through normal banking channels.
  • NRO. Non Resident (Ordinary) Rupee account in India.
  • Although the payment could be in rupees or any foreign currency, no repatriation benefits are applicable on these investments.

Can NRI get a Home loan in India?

Yes, as an NRI you can apply for a home loan in India. Getting a home loan is as easy for an NRI as a resident Indian. Some lender may, however, ask for a local power of attorney holder.

Can I lease my property in India even though I stay aboard?

If the NRI’s property is lying unused, he can lease it out and earn the proceedings. RBI approval or permission is not required. There are only two restrictions, (i.e.) the proceeds out of this lease is taxable and the proceeds cannot be taken out of India. Also, outright selling of NRI property does not require RBI permission although the profit on sale is liable to capital gains tax.

Can I sell my property?

If an NRI wishes to sell his property and take away the profits, then:

1. If property was bought in foreign exchange.

  • He can take away the proceeds.
  • Sale is restricted to only two properties
  • Sales allowed only after three years.

2. If property was bought in Indian rupees.

  • Money must be kept in India.

3. If property for commercial purposes is bought in foreign exchange.

  • Any or all can be sold
  • Entire proceeds can be transferred.

Is there a limit to the number of investments for acquiring commercial or residential properties in India?

Non Resident Indians are allowed to make real estate investments in India without any cap on the quantity or the number of investments.

Can a non-resident Indian gift his residential/commercial property?

Yes, an NRI / PIO may gift residential / commercial property to a person resident in India or to an NRI or a PIO. However, a foreign national of non-Indian origin gifting to another foreign national needs prior approval of the Reserve Bank of India.

Acquisition of Property

1. Purchase

There are no restrictions on the number of residential / commercial properties that can be purchased by an NRI / PIO under general permission.

2. Gift

(a) NRIs and PIOs can freely acquire immovable property by way of gift either from a person resident in India or an NRI or a PIO.
However, the property can only be commercial or residential. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.
(b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India through gift.

3. Inheritance

A person residing outside India i.e.

  • An NRI
  • A PIO and
  • A foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India. However, a citizen of specified countries (Pakistan, Bangladesh, Sri Lanka, and Afghanistan) should seek specific approval of Reserve Bank.

A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from

  • A person resident in India
  • A person resident outside India

However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at that point of time

Repatriation of applicant money for booking of flat/payment made to the builder by NRI/PIO

Refund of application / earnest money / purchase consideration on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property, together with interest, if any (net of income tax payable thereon), is allowed provided the original payment was made out of NRE / FCNR account of the account holder or remittance from outside India through normal banking channels and the authorized dealer is satisfied about the genuineness of the transaction.

Power of Attorney

The non-resident Indians who are staying abroad may enter into an agreement through their relatives and/or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or Developer, drafting and signing of agreements, taking possession, etc.) These formalities can be completed through some known person who can be given the Power of Attorney for this purpose.

Sale of Property

An NRI can sell property in India only to:

  • A person resident in India
  • An NRI
  • A PIO

A PIO can sell property in India only to:

  • A person resident in India
  • An NRI
  • A PIO (with the prior approval of Reserve Bank of India)

A Foreign national of non-Indian origin, including a citizen of any of the following countries viz. Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, and Bhutan can sell property in India with the prior approval of Reserve Bank to:

  • A person resident in India
  • An NRI
  • A PIO

Tax Benefits

Income Tax

Do I get tax benefit on Loan?

Yes.

Do I get Deduction on Interest?

The repayment of the interest portion of the EMI is allowed as a deduction under section 24 under the head “income from house property” up to Rs. 1,50,000/- for self-occupied property and full amount in case of let-out property if the purchase or construction is completed within a period of three years from the end of the year in which the loan is taken.

Do I get deduction on principal?

The repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs. 1 lakh. You can also claim deduction under Section 80C towards payment made for stamp duty, registration fee and other expenses for the purpose of transferring the property in the name of the assessed. All these deductions however should not exceed the overall limit of Rs. 1 lakh.
However, deduction under Section 80C is not available in respect of payment made towards the cost of any addition, alteration, renovation or repair carried out after the issue of the completion certificate.

Income from House property

According to the Indian Income Tax Act, if a person (resident or NRI) owns more than one house property, only one of them will be deemed as self-occupied. There will be no income tax on a self-occupied property. The other one, whether rented or not, will be deemed to be given on rent and deemed rental income (based on certain valuations prescribed by the income tax rules) will be added to income. Further, TDS will be deducted on actual rental incomes earned by NRI.

Wealth Tax

Wealth tax is levied on the value of specified assets in excess of the Rs. 30,00,000. Specified assets include house property. However, the Wealth Tax Act provides an exemption in respect of one house property. There is a specific exemption available for returning Indians in respect of investment made in house property out of money brought from outside India or from balances held in NRE accounts as on date of return to India.

Capitals Gains

If a residential property is held by the seller for more than 36 months, it is considered a long-term investment or else short term. Long Term Capital Gain shall be computed by considering Indexed cost of acquisition. NRIs are entitled to claim exemption from capital gains tax if they reinvest in specified assets as per Income Tax Act.

Certificate for deduction at Lower rate or tax exemption certificate

Section 197 of the Income Tax Act, 1961 provides for deduction of tax at lower rates in certain cases. The rate prescribed for TDS from NRI’s income is the maximum rate of tax at which relevant Income is taxable in India. However, in majority of the cases of NRI, the actual tax liability is lower than this.
However, the higher deduction of tax so made is generally not claimed as a refund by filing Return of Income. In order to assist such situation, the Income Tax Act has provided procedure under section 197 whereby an NRI can apply to the Assessing officer (in prescribed form) to issue specific certificate authorizing the payer of income (who normally deducts tax at highest prescribed rate) to deduct tax at a lower rate or nil rate. The NRI should estimate his income, tax liability and likely TDS and then apply for partial or complete Tax Exemption Certificate. The payer shall deduct tax in accordance with the certificate of the Assessing officer.