Are you ready to invest in property? Here is everything you need to know about the rules for property registration in India.
The act of verifying and registering property documents in the registrar’s office per the registration act of 1908 is “Property Registration.” To legally acquire property ownership, one must take this crucial step, and it is also beneficial for future operations like sales or loans against real estate.
Most states still require buyers to visit the sub-registrar’s office to register their premises. In contrast, others have introduced online facilities to assist owners in doing so to provide convenient and timely services. These online applications might be used to register both flats and plots.
Per Section 17 of the Registration Act of 1908, all purchasers must legally register their property in their name. It means that you cannot choose from this requirement. As part of the procedure, homeowners or landowners must pay their state governments a specified amount of the contract’s value in stamp duty and a 1% registration fee.
Importance of Property Registration
The primary focus while purchasing a property should be registering it in the respective person’s name; it establishes one’s authority to conduct any activity on his entitled land. The property’s entitlement can only be acquired when the purchaser registers the property in his name. Some of the advantages of registering property are as mentioned:
- The former owner or the builder will be regarded as the legitimate owner if the person fails to register the property in his name.
- The legality of the sale of the property will only be considered when it is fully stamped and registered.
- After registration, the person holds the title of the land owner.
- If the property is not registered with the respected party’s name, they will not have any entitlement to the property at the time of the dispute.
- If the person is a valid registered property owner, no other person can transfer the title of that property in his name.
Applicability of Laws in Property Registration
In India, it is required to register any property one purchases for more than 100 rupees; failing to do so is an offence that carries a fine. An Indian citizen purchasing or selling property must carefully obey the rules on property registration that the Indian Government has put into effect. The relevant legislations are as follows:
- Section 17 of the Registration Act of 1908 mandates that citizens of India are required to register any movable property worth more than Rs 100 in official records. Failure to do so is a punishable offence.
- The Indian Stamp Act of 1889 mandates that stamp duty is paid on all real estate documents that must get registered.
- The rent control act addresses tenants’ and landlords’ rights and responsibilities while outlining the registration, conditions, jurisdiction, and consequences.
The legality of the Rent Agreement
In 1948, the Indian Government passed the Rent Control Act India, an effort to end the exploitation of tenants by landlords. A contract between a tenant and a landowner that provides for a one-year lease on the latter’s property must be registered with the Sub-registrar’s office according to Section 17 of the Registration Act. If a rental agreement is formed for less than a year, registration is not required, and the tenant wouldn’t be subject to eviction by the landlord before the expiry of the lease. Similarly, if a tenant is discovered to be involved in misconduct, the landlord is within his legal rights to evict them. If a landlord wants to evict a tenant, he must have reasonable grounds. The violation under the rent control act and Indian law, such as terrorism or crimes against the state, may be responsible for the eviction.
Rules for Registration of Property in India
The Registration Act of 1908 governs the land registration rules in India. To register a property, it’s essential to submit the forms and pay fees and stamp duty. The seller and the buyer must do the documentation before registration of the property. The Government of India has provided some rules for property registration in India. When registering a property, one must follow these rules.
- One won’t have to wait much as copies of each document will be made available on the same day because of technological improvements and the computerisation of everything.
- A government-acquired non-registered property cannot seek damages under Income Tax 80C.
- Unregistered property has no legal jurisdiction and cannot be used as evidence in court.
- Four months after the registration date, the required documents must be submitted.
Documents Required for Registration of Property
During property registration in India is essential to submit all the necessary documents. For metropolitan areas, it takes 2-3 days and up to 7 days for rural areas to register documents of the property.
The documents required for property registration are:
- Passport-size photos of both buyer and seller and the two witnesses
- Aadhar card or pan card copy as identity proof
- Power of attorney
- Copy of the recent property registry card
- Copy of property registry card and,
- Municipal tax bills
- [non-objection certificate] NOC
- Verified Sale Deed Copy
- Payment receipt for the Stamp duty and registration fees
A certificate including all the relevant information is returned along with the original deed document presented during the registration process.
Once registration is done, one must submit a mutation application. A mutation affects the possession of the property. An affidavit, a surety bond, a certified copy of the signed sale deed, and an application for mutation are submitted.
Procedure for Property Registration
The following are the steps:
- Evaluating the property’s value – To pay stamp duty, one must analyse and calculate the property’s value based on the local market. Comparing the original sale price or the amount paid to the property’s value in your locality. Stamp duty is determined based on the amount taken from them, whichever is higher.
- Calculation of the Stamp Duty – Stamp duty varies from state to state. One can visit websites that offer free property evaluation services to get an idea of the stamp duty.
What is Stamp Duty?
It is required to pay property stamp duty while transferring the ownership of your property to another individual. The state government charges this cost for the paperwork necessary for registering property. Different states have different stamp duties and registration fees. Section 3 of the Indian Stamp Act 1899 makes it essential to pay stamp duty while registering a property.
Even under the rent control Act of India, one must pay stamp duty while purchasing or for rental agreements in India. Section 3 of the Indian Stamp Act of 1899 defines the payment of stamp duty.
- Stamp Papers – Purchasing legal stamp papers equal to the stamp duty’s cost is required.
- Creating the Sale Document – It is vital to construct and write the sale deed on stamp papers. Generally, a competent attorney drafts the sale agreement on the buyer’s behalf. The sale deed may include a lease, purchase, mortgage, etc.
- Registration Fee – After preparing the stamp papers, one may pay the stamp duty with the stamp collector’s help. Before registering a property, fees for property registration must be paid.
- Seeking Sub-Registrar for Registration– To register the property, it is necessary to schedule a meeting with the Sub-Registrar in whose district the subject matter is based. Two witnesses are required to visit the sub-registrar’s office. Each of the parties- the buyer, the purchaser, and the two witnesses—must bring three passport-size pictures and proof of identification [adhar card or pan card]. The registrant of any property must also provide a photo of the property with their submission. Additionally, it is necessary to carry two copies of the deed in addition to the original.
- Providing the Required Documentation – In addition to the deed, one must provide the following paperwork to complete the registration: a copy of the payment of the stamp duty, NOC if the property is located on the land owned by the collector of the city, identification and address proof, a demand draft or money to cover the stamp duty, passport-size photos of respected parties, etc. After that, a detailed list of documents is provided.
- Verification Procedure – at the sub-registrar office, the verification is done by checking if the applicant is a performing or claiming party’s representative.
The sub-registrar stamps the paper with stamp number 1 if it is validated. The sub-registrar then confirms the payment of the stamp duty, registration fee, applicable penalties, and other additional property registration fees.
If it is also approved, the sub-registrar applies stamp number 2. Then, witnesses are identified by recording their initials, signatures, and additional details like their address and line of work.
Following completion of verification, the sub-registrar applies stamp number 3.
When the sub-registrar determines that all the paperwork is in order, he issues an order for the property to be registered.
- Registration Certificate – After 2–7 days, the fully registered documents can be collected from the sub-registrar’s office. The certificate will include the word “Registered” in addition to the title and the number of pages included in the document. The sub-registrar will retain the copies of the deed provided and return the original copy to the applicant.
How is Stamp Duty Calculated?
The value of the property is used in calculating stamp duty. Every state has its own set of supporting procedures used to calculate it. It is often paid according to a government-determined market rate. In addition, stamp duty differs depending on whether a property is private or public, as well as located in an urban or rural area. One can pay stamp duty for the property an individual is about to buy in one of the three ways. One may think about paying the duty by e-stamping, non-judicial stamp paper, or an institution that is permitted to take this kind of payment simply. There are also additional costs associated with subsidising the state where an individual buys the property.
The calculation of stamp duty fees also considers some additional elements. The key facts are:
- Property (new or old)
- Area of the property
- Location of the property
- Age of the purchaser
- The utilisation of the property, whether it is commercial or residential
- category of the property, whether land or a flat
Is it Possible to Register Land without Deed?
In rural India, owning property without a deed is relatively common. There are some methods by which one might register property or land without needing a deed, even though such instances are uncommon in urban areas. In such circumstances, the landlord must apply to the office of the Land Registry to register the ownership.
The landowner must provide sufficient evidence of his possession or explain why the land ownership deed is unavailable and other relevant information. In India, such holdings may only get registered with enough information and evidence.
Punishment for Providing False Documents
According to the Indian Registration Act of 1908, presenting fabricated testimony or documents to the sub-registrar’s office will lead to penalties, up to seven years in jail, or both, depending on the circumstances. The act also imposes fines or a 7-year prison sentence on personnel entitled to check the documentation if they purposefully register a false document. According to section 83 of the Indian Registration Act of 1908, the registering officer may initiate actions with the approval of the Inspector general, and any violation will be tried in court.
The Indian Registration Act of 1908 governs the procedures for registering real estate. It is necessary to do so within the allotted time frame to avoid paying fines to the sub-registrar office and protect an individual’s valid entitlement to the land. Once the application is approved, the purchaser becomes the property’s rightful owner.
The primary goal of registering a property is to establish the execution. Only after the document is registered the legal status is required and, if applicable, transfers ownership to the appropriate owner. Simply put, only if an agreement between the lender and the loan applicant has not been registered will a notice of intimation be issued. The notice of communication must be provided Within thirty days of buying the property.