Q. Is it compulsory to register an “Agreement to Sell” entered into with the seller of an immovable property?

A.:  It is not compulsory to register an agreement to sell entered between the seller of an immovable property and its buyer.  Only the Sale Deed is required to be registered.  Though optional, it is advisable to register the Agreement to sell.  The reason is, once it is registered, the buyer’s name will get entered in the encumbrance records. The property will be a change for the advance amount paid to the sellers.  It will not be possible for the sellers to cheat the buyer easily.  The cost of registering an Agreement to sell is very nominal.  Applicable stamp duty is Rs. 200/- only.

Q.: What is the appropriate stamp duty payable on Rental Agreement at Bangalore?

A.:  Stamp duty payable on Rental Agreement for a period below one year is Rs. 50/- and above one year it will vary depending upon the number of years as under:  

  1. Above one year not exceeding five years @ 5% on the average Annual Rental rate.
  2. Above five years but not exceeding ten years @ conveyance on twice of the average Annual Rental rate:
  3. Above ten years but not exceeding twenty years @conveyance on thrice the average annual rental rate.
  4. Above twenty years but not exceeding thirty years @ conveyance on four times the average Annual rental rate.
  5. Exceeding thirty years@ conveyance on prevailing market value

Q.:  Is it necessary to register a General Power of Attorney (GPA)?

A.:  It is optional. There are two types of Power of Attorneys.  One is General Power of Attorney and the other Special Power of Attorney.  When Power is given in respect of a particular act pertaining to one transaction it is called Special Power of Attorney.  When power is given in respect of a number of acts in a number of transactions it is called General Power of Attorney.  However, it is always advisable to hold a registered GPA while registering an immovable property in order to give better title to the property.

Q.: In whose name shall a non judicial stamp paper be bought for the purpose of documentation?

A: A non judicial stamp paper shall be bought in the name of a person who is a party to the instrument.

Q.:  What will happen to the validity of a document if the stamp duty paid is insufficient?

A.:  Insufficiently stamped document is treated as a document “not properly stamped”.  It is inadmissible in evidence in court of law, and hence such a document is liable to be impounded and sent to the stamp duty authority for recovery of appropriate stamp duty along with penalty.

Q.: What is the period of validity of a   stamp paper?

A.:  A stamp paper is valid for a period of six months from the date of purchase.

Q.:  What is the difference between Witness and consenting witness?

A.:  Witness is only a witness to the signature of the parties to a document.  Consenting witness is not only a witness to the signature of the parties to the document but also he is aware of the transaction by way of giving his formal consent for the transaction.  Consenting witness releases his right, title and interest in the property under transaction.  Consenting witness should be present and admit the execution of the registration of the document in the concerned office of the /sub-Registrar.   

Q.: Before purchasing a property is it necessary to give a Public Notice in a newspaper?

A.: While scrutinizing the documents of the property, an eminent advocate well versed in property matters, even though can trace ninety percent title sometimes may not be able to trace encumbrances like prior agreement, simple mortgage, court litigation etc., with respect to the property.  Therefore, to safeguard the interest of the purchaser, it is advisable to give a Public Notice in a leading local newspaper before purchasing the property.  It is not binding on any claimant to answer to such notice.  However, if any bona fide claimants are there, they will inform about their right, title and interest in the property with documentary proof.  Also such notice will inform the public at large that the purchaser is a genuine buyer of the property.

Q.: What is Gramatana site? Can one buy such a site?

A.: Gramatana site means the area earmarked for residential purpose within a village. Kaneshumari numbers denote the sites.  Even though Gramathana sites located in green belt area, it does not require conversion. However it should be in genuine gramthana area.  In and around Bangalore about 98% of gramthana sites do not come under genuine gramthana area. 

Q.:  What is an Affidavit?

A.:  Affidavit is a statement written down and sworn to be true, for use as legal evidence.  It is unilateral declaration of statement on oath made by a person on any matter.  It is an important document which is binding on the declarant.  Since an Affidavit is sworn before a Notary Public or a competent magistrate or a judicial officer, its contents have considerable evidentiary value.  When an Affidavit is sworn before a Notary, the Notary shall affix the required Notary stamp and make entry in the Notary book…Applicable stamp duty for Applicable stamp duty for Affidavit in Karnataka is Rs. …./- 

Q.: What are the formalities required to be completed by a foreign citizen of Indian origin, after purchase of an immovable property in India?

A.: A foreign citizen of Indian origin, after purchasing an immovable property in India, is required to file a declaration in form IPI with RBI Central Office at Mumbai within 90 days from the date of purchase of the immovable property or payment of final consideration, along with certified copies of the documents evidencing the purchased as well as bank certificate regarding the consideration paid to the seller of the property.

Q.: Can an NRI resell his property without permission from RBI?

A.: An NRI can resell up to two immovable properties without the permission of the RBI.  If, however, a foreign citizen of Indian Origin buys the property sold, he should remit funds towards the consideration price of the property in India through normal banking channels or out of the balance in NRE or FCNR accounts maintained by him. 

Q.: Can a foreign citizen of Indian origin gift away his immovable property?

A.: A foreign citizen of Indian origin can gift away up to two immovable properties to his relative who may be an Indian citizen or a person of Indian origin, without any permission from RBI.  However, income tax will have to be paid on such properties as per the rules for the time being in force.

Q.: Can a document relating to an immovable property in India be executed out of India?

A.: A document relating to an immovable property in India can be executed outside India.  However, it must be presented later for registration in India within a period of four months from the date of execution.

Q.: How does a person of Indian origin residing abroad execute a general power of attorney? 

A.: At the time of executing General Power of Attorney if the executants is not residing in India, he may execute it in the country where he resides before a Notary Public or Indian counsel or Vice counsel or a Judge or in Court or before a representative of the Central Government.

Q.: Can a person of Indian origin holding American passport possess immovable property in India?

A.: According to Foreign Exchange Management Act, a person holding American passport will be considered as a person of Indian Origin and there is no bar on him to own a property in India.

Q.: Is it necessary for an NRI to seek permission to purchase an immovable property outside India? A.: Before purchasing an immovable property outside India, an NRI shall first seek permission from the Reserve Bank of India.

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