BOUGHT A PROPERTY WITH DEFECTIVE TITLES OR DISCREPANCY OR VIOLATION OR DEVIATION OR FAKE DOCUMENTS ? DO NOT WORRY


Many properties with title defects and discrepancy, building plan violation, zonal violation, fake or manipulated licenses or approvals had been sold to innocent buyers.

Buyers, who had been cheated, can substantiate their case in the court of law and seek relief from the court and initiate appropriate proceedings against the offenders.  But, in our system, this process takes its own sweet time, due to such delays, the buyers are unwillingly compelled not to take or initiate any action against the cheats and frauds.  But, the buyers must take appropriate action at the right time, if not, legal relief might not be available.

Legal remedy is available to the affected and the buyers need to take swift and stern action against the seller.

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REALTOR UNDER THE INCOME TAX SCANNER AT BANGALORE


POLITICALLY POWERFUL REALTOR GROUP, WHICH ACQUIRED HUGE STRETCH OF PROPERTIES, EVER SINCE, THE ARRIVAL OF NEW GOVERNMENT IN THE STATE IS UNDER THE SCANNER OF ENFORCEMENT DIRECTORATE AND SCRUTINY BY THE INCOME TAX DEPARTMENT.

THE AGENTS, DIRECTORS, SELLERS AND BUYERS ARE IN THE NET.

IT IS SAID THAT THE CATCH WILL BE HUGE WITH LOTS OF INPUTS FROM DIFFERENT SOURCES.

IT IS ALSO SAID THAT THIS NEW GROUP EMERGED, ALL OF A SUDDEN FROM THE BRINK, RAISING SUSPICION.

The importance of property registration in India


REGISTRATION OF PROPERTIES AND TRANSFER OF PROPERTY IN INDIA

The system of registration of documents was in vogue in British India and the same process and procedure is continued now with little changes. As per the Registration Act, the following documents must be registered mandatory/compulsorily with the jurisdictional sub-registrars in India. The Registrars were appointed for each district and required them to register the following documents:

1) Deeds of sale or gifts of lands, houses and other real property;

2) Deeds of mortgage on land, houses and other real property, as well as certificates of the discharge of such encumbrances;

3) Leases and limited assignments of land, houses and other real property, including generally, all conveyances used for the temporary transfer of real property;

4) Wasseathnamas or Wills;

5) Written authorities from husbands to their wives to adopt sons after their (husbands’) demise;

Firstly, Section 6 of the Madras Regulation was similar in terms to the corresponding provisions of the Bombay and Bengal Regulations. This was the most important provision of these Regulations. Mulla’s commentary on the Registration Act sets out in full section 6 of the Bombay Regulation. Firstly, it provided that every deed of sale or gift registered under the Regulation would invalidate any unregistered deed if the same nature whether executed prior or subsequent to the registered deed.

Secondly, it provided that every registered mortgage deed would have priority over any unregistered mortgage deed whether executed prior or subsequent to the registered mortgage.

Thirdly, it stated that the object of the two preceding rules was to prevent persons being defrauded by purchasing or receiving in gift or taking in mortgage real property which may have been before sold, given or mortgaged, and that persons would never suffer such imposition when they are appraised of the previous transfer or mortgage of the property.

It therefore provided that if the buyer, donee or mortgagee had knowledge of the previous sale, gift or mortgage, the rule of invalidation or priority mentioned in the previous two clauses would not apply.

Registration Act, XVI of 1864 was enacted except in Bombay where an important change was introduced by a Regulation of 1827. Section 13 of that Act provided that, certain documents shall not be received in evidence in any court or be acted upon by any public officer unless the document shall have been registered. It may noted that this section itself did not specifically say that these documents must compulsorily registered but the same result was secured by means of the sanction of refusing to receive in evidence such documents, if unregistered. The Registration Act, XX of 1866 provided that instruments of the four classes mentioned therein must be registered. The Registration Act, 1866 was repealed by the Act III of 1877 which was amended from time to time till it was replaced by the present Act XVI of 1908.

The Indian Registration Act, 1908 presently extends to whole of the territory of India excluding the state of Jammu and Kashmir to which State the relevant legislative power of the Parliament does not extend.

The provisions of the Act may be broadly grouped under three heads. The first head relates to the documents which are registerable under the Act. The second relates to the procedure to be followed for getting a document registered under the provisions of the Act. The third deals with the administrative machinery provided under the Act and the respective duties of the different classes of officers.

The documents registerable under the Act fall under three categories

In the first category, documents relating to transactions which according to the substantive law, can be effected only by registered documents. It is hardly necessary to point out that the Registration Act does not lay down that any transaction in order to be valid, must be effected by a registered instrument.

What it provides is that when there is a written instrument evidencing a transaction, it must, in certain cases, be registered, while in other cases, it may, at the option of the parties, be registered, in the manner laid down in the Act. The obligation to get a transaction effected only by a registered instrument is laid down by the substantive law. Thus, as per the provisions of the Transfer of Property Act, 1882 sales, mortgages, exchanges, gifts and leases requires to be effected only by registered instruments subject to an exception in case of some transactions relating to immovable property of less than ‚100 in value. Similarly, as per section 5 of the Indian Trusts Act, 1882 a trust in relation to immovable property is valid only if it is declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered or by the will of the author of the trust or of the trustee.

The substantive law, however, does not provide the machinery for effecting registration. It is the Registration Act which provides the machinery for effecting registration and the parties to the registerable documents must necessarily have recourse to the provisions of this Act.

Under the substantive law, certain transactions can be effected without a writing example partitions, releases, settlements etc. But, if the transaction is evidenced by a writing and relates to immovable property, the Registration Act steps in and clauses (b) and (c) of Section 17(1) require registration of such documents, subject to the exception specified in sub-section 2 of that section. If an authority to adopt is conferred in writing, other than a Will, it is also required to be registered [section 17(3)]. These documents fall under the second category. 

It is open to the parties, if they so choose, to get certain documents registered at their option and this is permitted by section 18.

WILLS

Wills need not be registered but it is open to the parties to get them registered under the third category.

The Act further provides for the consequences of non-registration of documents [section 49] and the effects of registration [section 48 and 50]. To enable a person to get a document registered under the Act, certain conditions have to be fulfilled and certain formalities to be observed. The document must contain a description of the property and has to be presented for registration in the proper registration office within the time limited by the Act. The details regulating presentation, such as time for presentation, place of presentation, persons entitled to present a document and the mode of enquiry before the Sub-registrar are all dealt with in various parts of the Act. If the Registrar also refuses registration, a suit under section 77 can be filed within 30 days of his Oder for a direction that the document be registered. This in brief is a summary of the procedure laid down by the Act.

The Act also prescribes the machinery for the administration of the Act. The administration of the Act is the duty of each State Government. Each state is divided for the purposes of the Act into districts and sub-districts. At the apex of the administration is the Inspector General of Registration and under him a Registrar for each district and a Sub-registrar for each sub-district. Besides these, there is a provision for the appointment of Inspector of Registration Offices. These appointments are to be made by the State Governments.

From the brief analysis of the provisions of the Act it is clear that the object of the Registration Act is to preserve as authentic record of the terms of documents so that if a document be lost or destroyed or misplaced, a certified copy from the Registrar can be obtained. Registration also facilitates the proof of execution of a document as its execution is admitted by the executant, before the Sub-registrar. Yet another useful purpose that registration serves is to enable any person intending to enter into any transaction relating to immovable property to obtain complete information relating to the title to such property and for this purpose to look into the register and obtain certified copies of the documents.

Registration of sale of an immovable property creates a right in rem in favor of the buyer of the property with exclusive possession of the property till the same is transferred. In case of lease, the lessee enjoys the exclusive possession of property for a defined period.

 

The ISSUES the buyer may face to implement this TDS provisions – The rate of 1% may increase to 20% if seller does not provide PAN due to overriding provision of section 206AA of ITA.


  • Obtaining TAN number for complying with the provisions;
  • Issuance of TDS certificate to the seller;
  • Filing of TDS return quarterly and mention PAN of the seller;
  • Taxes needs to be deposited within the specified time limit with the Government; and
  • May be scrutinized by the TDS officer

The rate of 1% may increase to 20% if seller does not provide PAN due to overriding provision of section 206AA of ITA.

BUDGET – INTEREST BENEFIT FOR LOWER CATEGORY – TDS FOR HIGHER VALUE HOMES – SERVICE TAX ABATEMENT AT 70% FOR HIGH END APARTMENTS


First Home Buyer will get an additional benefit on Interest limit:

There is an additional deduction available on interest repaid on a loan for a first time house purchase. The benefit has been increased by an additional Rs 1 lakh and this will be over and above the Rs 1.5 lakh limit already available,provided, if the house property price is less than Rs 40 lakh and the loan(availed) is Rs 25 lakh or less. This benefit can be claimed or availed in the next year, if not availed in the first year.

Tax Deducted at Source:

The Finance Minister has proposed 1% TDS for all immovable properties valued over Rs50,00,000/-. The seller of the house property worth Rs 50 lakh or more, will have to ensure a 1% tax deduction at source on the amount of the sale and will have to deposit this with the government. The TDS amount has to be deposited as per the guidelines and obtain a certificate and must be attached or furnished or submitted to the sub-registrar at the time of registration.

Service Tax:

As per the new proposal, The Service Tax for the new apartments(high end) either 2000 Square feet of CARPET AREA or the VALUE IS ABOVE Rs1,00,00,000/-, the abatement is 70%, which was uniform at 75% in the preceding year.

It means that the high end apartments will have to pay additional service tax on 5%.

Details:

 

Tax Deduction at Source (TDS) on transfer of certain immovable properties (other than agricultural land)

This amendment will take effect from 1st June, 2013.

There is a statutory requirement under section 1 39A of the Income-tax Act read with rule 11 4B of the Income-tax Rules, 1962 to quote Permanent Account Number (PAN) in documents pertaining to purchase or sale of immovable property for value of Rs.5 lakh or more. However, the information furnished to the department in Annual Information Returns by the Registrar or Sub-Registrar indicate that a majority of the purchasers or sellers of immovable properties, valued at Rs.30 lakh or more, during the financial year 2011-12 did not quote or quoted invalid PAN in the documents relating to transfer of the property.

Under the existing provisions of the Income-tax Act, tax is required to be deducted at source on certain specified payments made to residents by way of salary, interest, commission, brokerage, professional services, etc. On transfer of immovable property by a non-resident, tax is required to be deducted at source by the transferee. However, there is no such requirement on transfer of immovable property by a resident except in the case of compulsory acquisition of certain immovable properties. In order to have a reporting mechanism of transactions in the real estate sector and also to collect tax at the earliest point of time, it is proposed to insert a new section 194-IA to provide that every transferee, at the time of making payment or crediting of any sum as consideration for transfer of immovable property (other than agricultural land) to a resident transferor, shall deduct tax, at the rate of 1% of such sum.

In order to reduce the compliance burden on the small taxpayers, it is further proposed that no deduction of tax under this provision shall be made where the total amount of consideration for the transfer of an immovable property is less than fifty lakh rupees.

Changes in Service Tax – High end apartments

This will come into effect from March 1, 2013.

Subject: Union Budget 2013: Changes in Service Tax-reg.

The service tax changes in Budget 2013 are largely guided by the objectives to provide a stable tax regime and improve voluntary compliance. The important changes are as follows:

A. Legislative changes

Following changes are being made in the Finance Act, 1994:

C. Abatement

5. The abatement available under S. No 12 of notification 26/2012-ST dated June 20, 2012 for construction of a complex, building, civil structures etc. is being reduced from the existing 75% to 70% for construction other than residential properties having a carpet area up to 2000 sq ft or where the amount charged is less than Rs. 1 crore.

 

TAX BENEFITS OF INVESTMENT IN RESIDENTIAL UNIT

This amendment will take effect from 1st April, 2014

Income tax benefit

A new section 80EE, has been proposed in the Direct Tax, which provides an additional exemption of Up to Rs. 1 lakh against the interest payable.

The proposed new section 80EE seeks to provide that in computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section,

  • interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.
  • It is further provided that the deduction under the proposed section shall not exceed one lakh rupees
  • and shall be allowed in computing the total income of the individual for the assessment year beginning on 1st April, 2014
  • and in a case where the interest payable for the previous year relevant to the said assessment year is less than one lakh rupees, the balance amount shall be allowed in the assessment year beginning on 1st April, 2015.

It is also provided that the deduction shall be subject to the following conditions:-

(i)  the loan is sanctioned by the financial institution during the period beginning on 1st April, 2013 and ending on 31st March, 2014;

(ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed twenty-five lakh rupees;

(iii)  the value of the residential house property does not exceed forty lakh rupees;

(iv)  the assesse  does not own any residential house property on the date of sanction of the loan.

It is also provided that where a deduction under this section is allowed for any assessment year, in respect of interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provisions of the Income-tax Act for the same or any other assessment year.

It is also proposed to define the term “financial institution”.

This amendment will take effect from 1st April, 2014 and accordingly apply in relation to the assessment year 2014-15 and subsequent assessment year.

 

CAUTION – APARTMENT BUYERS – PRE LAUNCH OFFERS FROM LITTLE KNOWN OR UNKNOWN GROUPS


PLEASE BE CAREFUL AND CONDUCT DUE DILIGENT EXAMINATION AND THE SCRUTINY OF THE DOCUMENTS, APPROVALS AND COMPLIANCE OF THE PRE LAUNCH OFFERS FROM UNKNOWN, LITTLE KNOWN, DISREPUTE OR STRANGE GROUPS.

DO NOT MAKE ANY PAYMENT OR NOR GIVE ANY MONEY, UNDER ANY CIRCUMSTANCE WITHOUT PROPER AND DILIGENT TITLE CLEARANCE AND APPROVALS FROM THE APPROPRIATE DEPARTMENTS AND BODIES.

EXERCISE UTMOST CAUTION:

BUT, BUYING IT FROM WELL KNOWN AND STANDARD BUILDERS ARE RECOMMENDED.

ALWAYS PREFER THE BEST AND THE TOP BUILDERS LIKE

BRIGADE, STERLING, PURUVANKARA, MANTRI, SOBHA, TATA, GODREJ, DLF, HIRANANDANI, SHRIRAM, PRESTIGE & ADARSH  etc, even, if there are any minor issues, they are capable of resolving it and fulfill their commitments and promise.

DLF AGREEMENTS ARE BIASED AND UNFAIR – COMPETITION COMMISSION OF INDIA


THE COMPETITION COMMISSION OF INDIA REWRITES THE SALE AGREEMENT OF DLF- ANOTHER KICK TO THE REALTY MAJOR FOR MISUSING ITS DOMINANCE !!!!

BELAIRE OWNERS’ASSOCIATION .…. INFORMANT

VS.

DLF LTD. …. OPPOSITE PARTY-1

HARYANA URBAN DEVELOPMENT …. OPPOSITE PARTY-2

AUTHORITY

 

DEPARTMENT OF TOWN & COUNTRY …. OPPOSITE PARTY-3

PLANNING, STATE OF HARYANA

 

Through:- Shri Vaibhav Gaggar, advocate for informant and

Shri Ravinder Narain, advocate for opposite party no.1

Supplementary Order u/s 27 of the Competition Act, 2002

 

The Commission vide its order dated 12th August, 2011(the order) in above case had held DLF Ltd. as a dominant enterprise in the geographic area of Gurgaon in the relevant market. The Commission found that DLF Ltd. had abused its dominant position and violated the provisions of Section 4 of the Competition Act, 2002(the Act) as DLF had made the flat owners i.e. members of the Informant association to sign a highly abusive apartment buyers agreement. In para 12.90 of its order, the Commission had noted a number of clauses of the agreement as examples of abusive nature. The Commission observed in para 12.91 that DLF Ltd. had made it clear to the allottees that no alterations/modifications were to be made in the said agreement by the allottees. The Commission in para 12.95 had observed regarding commencement of project without sanction/approval, increase in number2 of floors midway, increase of Floor Area Ratio(FAR) and density per acre(DPA), inordinate delay in completion and possession, forfeiture of amounts, etc. The Commission found that the clauses of the agreement were biased in favour of DLF Ltd. In para 12.101, the Commission observed that certain clauses in the agreement gave DLF a sole discretion in respect of making changes in zoning plans, usage pattern, super area, carpet area and for alteration of structure and even a case of change of location of apartment and if a refund became due, no interest was payable by the builder. No rights had been given to buyers for raising objections. Even if the buyers had paid full amount, the builder could create mortgage on the property of the buyers for raising finance for its own purpose. DLF Ltd. inserted such clauses which made exit next to impossible for buyers. In case of delay by the builder, DLF Ltd. was to pay compensation of Rs. 5 per sq. feet per month equivalent to about 1% per annum interest, while in case of delay in payment by the buyer, the interest charged was 15% per annum for the first 90 days and 18% thereafter.

The Commission came to conclusion that the conduct of DLF Ltd. was unfair in terms of section 4 and was being carried out by it because of its being a dominant enterprise and amounted to abuse of dominance.

THIS ORDER MAY BE USED AS A BENCH MARK FOR DRAWING UP AGREEMENTS BY ALL THE BUILDERS.

THE CONTENTS ALSO APPLIES TO THE HIRANANDANI UPSCALE OR ITS ASSOCIATE COMPANY SAUDELA CONSTRUCTION COMPANY, WHICH HAS DRAWN THE SALE AGREEMENT ON THE SIMILAR LINES OF DLF !!!