If you purchase a property in India which costs more than 100 rupees, you need to register it. The registration of land is governed through Section 17 of the Registration Act 1908. The registration of the property is mandatory wherever the purchase and sale of the immovable property are involved. If the property isn’t registered under the name of the buyer in the official records of the government, they will not be the legitimate proprietor of the property and cannot challenge it in court in the event of a disagreement.
Looking for a house you’d like to purchase may be simple nowadays, but registering the property is difficult. We’ve compiled comprehensive information on property registration laws, procedures, fees, documents, and more to make registration of property easy for you.
Is Property Registration Mandatory?
It is compulsory to have your property registered in India in accordance with Section 17 of the Registration Act. Registration is not required for properties with a value lower than Rs 100. The new owner carries out property registration after stamp duty, paying registration fees. The registration fees and stamp duty differ slightly from state to state.
Laws Applicable to Property Registration
The following laws are applicable to property registration in India:
- Registration Act 1908: In section 17 of the Registration Act 1908, it is recommended that the sale of all immovable property valued over Rs 100 needs to be registered.
- Indian Stamp Act, 1889: It is compulsory to pay the stamp duty on all property documents that need to be registered.
Things to look for before you register a property
Registration of property within India is difficult and could have long-term implications. Therefore, you must be extra cautious while you register. Here are some important things to bear in mind when registering a property:
- The chain of documents – The buyer must check the documents related to when and how the property is transferred from one owner to the next.
- Due clearance: Before purchasing the property, ensure that the electricity bill, water bill, taxes, etc. must be updated and cleared.
- Calculation of stamp duty: The property’s current market value determines stamp duty calculation, which differs from state to state.
- Preparation of a deed: The terms and conditions, the buyer and seller details, and other details must be drafted in a sale of deed. It could be a sales deed, gift deed, lease deed, etc.
- Encumbrance Certificate – The encumbrance certificate guarantees that the property is not subject to mortgages or legal issues. Buyers must verify this prior to purchasing the property.
The documents required for land registration
Document submission is among the most crucial steps in the process of registering land. The reason for document submission is to record the execution of documents. It is recommended to register documents within four months from the date of execution. If the time limit has expired and you want to extend it, send an application to a sub-registrar stating the reasons for the delay. A sub-registrar might agree, but you’ll need to pay the fine. The process of registering documents can take upto seven days. The process takes 2 to 3 days in metro cities, and in remote areas, it can take as long as seven days. To prevent delays, you must have the following documents ready:
- Passport-size photographs of the buyer and seller
- Identity proofs of both parties: Aadhar card, Pan Card
- Power of attorney
- Property Registers card copy
- A copy of the municipal tax bill
- NOC (No Objection Certificate)
- Verified Sale deed copy
- Construction completion certificate
- The receipt for payment of the Registration fee and stamp duty
The process of land registration
In order to register a property in your state, you will be required to follow these instructions:
- On the basis of the circle rate in that area, calculate the value of the property.
- After calculating the value of your property, you need to buy a non-judicial stamp paper. The stamp paper is available online or bought from a licensed stamp vendor.
- Based on the nature of the transaction, the deed should be typed on the paper stamp. It could be a sale deed, gift deed, or any other.
- To register the deed, both the buyer and seller should go to the sub-registrar’s office along with two other witnesses. The seller and buyer should carry photographs, identification evidence, and other essential documents.
- You have to pay the registration fees prior to the registration of the property.
- The submitted documents are checked, and a receipt will be issued once the deed has been registered. To get the sale deed, go to the registrar’s office after two to seven days.
Online Registration of Property
With technology reaching new standards, you can apply for property registration online. But, this service is only available in a few states. You can calculate the stamp duty, pay the stamp duty and registration fees online, and then receive an invoice for your payment on a website. Make payment via Net Banking/debit card/credit card or a payment bank.
Guidelines for Online Property Registration
As we have discussed earlier, in India, only a few states are permitted to offer online registration of property. If your state is providing such a service, you need to keep these guidelines in mind:
- You should check if the state where the property is located offers an internet-based portal for property registration.
- You can avail only the following services on an online portal.
-Check Stamp duty rates.
-Pay the stamp duty and registration fee.
-Receive payment receipt online
- Go to the office of the sub-registrar in order to complete your registration using your payment receipt.
- You must pay your TDS of 1 percent on property value online if the property’s value is more than Rs 50 lakh.
- When you register online, be sure to provide your name, address, type of property, ownership status, details of your property, and proof of ownership.
The factors that affect the cost of registration for property
The registration cost of a property is determined by a variety of factors, such as these:
- Type of property: The registration cost differs for commercial and residential properties. The cost is higher for commercial properties because they were designed for business use and need more facilities.
- The age of the property: The registration costs are high for a newly constructed property as compared to an older one.
- Transfer type: Registration fees are lower when the property is registered under a gift deed and if it is transferred to a family member. The government charges an annual registration fee of 5% if a non-family member buys the property.
- Location of property: Registration fees are high if your property is near a railway station, bus stop, or airport. In urban areas and developed towns, registration fees are quite high.
- Facilities: The registration fees are very high for facilities such as the library, gym, pool, clubhouse, etc.
New rules on the registration of property in India
The new rules regarding the registration of property came into force in 2020. The same rules will apply until new regulations are introduced. The new rules are as follows:
- Copies of all documents are made available on the same day because of computerization.
- A property that isn’t registered is not valid evidence that can be used in court and does not have legal validity.
- A non-registered government-acquired property can’t claim compensation under Income Tax 80C.
Benefits of registration of properties
After buying your dream home, it is important to have the property registered. The benefits of having your property registered are as follows-
- Land ownership disputes can be easily resolved.
- If the land is already registered, land ownership information can be easily obtained from the sub-registrar’s office.
- The government will compensate for the mistakes made by the registrar during registration if the buyer has incurred any losses.
- The seller can claim a tax deduction benefit if the property is registered, as per section 80C.
