FAQ

Frequently Asked Questions

What documents need to be verified before purchasing a flat?
Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself.
What important documents should one check for before buying any property?
If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
What are the formalities specified under the Indian Income Tax Law, if any, that one has to complete before or after selling any property, commercial or residential?

You have to obtain Permission under section 230A of the Income Tax Act if the value of the property to be sold is more than 5 lakhs.

Are incidental charges like brokerage, registration fees, stamp duty and other charges arising out of the sale of a house property deductible from the profit arising on sale?These expenses are allowable expenses from the full value of consideration of the sale of house property.

Is there any way by which I can claim exemption from tax on capital gains?

The Income Tax Act has made provision under sections 54, whereby you can claim exemption from tax on capital gains.

Section 54 - Purchase or construct another residential house worth the amount of capital gains.

Section 54 protects capital gains arising out of sale (or transfer) of a residential house whether self-occupied or not, provided the assessee has purchased within 1 year before or 2 years after the date of sale of the original asset or has constructed within 3 years after that date, a residential house.

The only condition is that the newly-acquired property should not be sold within 3 years from the date of its purchase or construction. If this condition is not satisfied, the cost of the new asset is to be reduced by the amount of long-term capital gains exempted from tax on the original asset and the difference between its sale price and the reduced cost will be chargeable as short-term capital gain earned during the year in which the new asset is sold. This condition is unfair.

Who is an NRI ?
TA person who is not ordinarily a resident of India as per Income Tax Act is an NRI .
I am an NRI. I want details considering property matters in India?
Firstly, mortgage of the property is required as security. Additional security by way of deposit of title deeds and/or such other collateral security as may be necessary. An additional interim security may be required, if the property is under construction. Collateral or interim security could be in the form of assignment of life insurance policies, surrender value of which is at least equal to the loan amount, pledge of shares and other such investments.
What security will NRIs have to provide?
Firstly, mortgage of the property is required as security. Additional security by way of deposit of title deeds and/or such other collateral security as may be necessary. An additional interim security may be required, if the property is under construction. Collateral or interim security could be in the form of assignment of life insurance policies, surrender value of which is at least equal to the loan amount, pledge of shares and other such investments..
Can NRI's give a Power of Attorney in favor of a person of his choice in India to complete loan formalities on his behalf?
  • Yes
When can I apply for a house loan?
Once you have decided to acquire or construct a property, you can apply anytime thereafter, even if the property has not been selected or the construction has not commenced. Besides, loans are also available for home improvements, renovation or extension of your home.
How do I make an application?

You need to approach a Housing Finance Company (HFC) with the latest salary slips and TDS form 16 of the last two financial years of yourself and your co-applicant, if any. The loan officer will then tell you the loan amount you are eligible for and the terms of the same.

You need to submit the application form along with the necessary documents. On receipt of the application form, the HFC reviews it, asks questions wherever necessary and convey its decision to the applicant. You are advised to visit more than one HFC since you are likely to get better terms / larger loan amount.

Can one take a home loan for construction in a city while working in another city?
Yes, you can take loan for construction in one city while working in another city. The HFC's generally service this loan after getting details of the plot legally verified.
How much time does it take to get an application processed and the loan sanctioned?
It takes around fifteen days for processing of one's application if the documents are in order. It takes another week
What is the maximum amount which I can borrow? How is the maximum amount derived?
Home loans are generally provided for in the range of 75%-85% of the asset value. The amount of loan varies from institution to institution and it may vary from Rs.1 lakh to Rs.1 crore. The maximum amount, which one can borrow, is a function of many factors, which includes primarily the purpose of the loan. In addition, ones residential status whether resident in India or non-resident will also have a bearing on the maximum amount of loan that one can borrow. Generally, if one is a resident Indian, then he can borrow upto 85% of the cost of the property.
What are the repayment period options?
Repayment period options range generally from 1 to 20 years. A few lenders also offer a 30-year repayment period, usually at a higher interest rate. As a non-resident, you can avail of a loan for a maximum period of 15 years.
What are the documents required to be submitted with application form?
The common documents required at the pre-approval stage are :
  • Proof of Age
  • Copy of Bank A/C statements for the last 6 months
  • Copy of latest credit card statement
  • Passport size photograph
  • Signature verification from the borrower's banker


If salaried person:
  • Salary and TDS certificate
  • Latest pay slip
  • Letter from employer


If self-employed person:
  • Business track record
  • Copy of audited financial statements of the last 2 years
  • Latest income tax return
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