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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Chennai > 2% stamp duty on construction agreement
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Old October 3 2013, 12:34 PM   #11
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My understanding is that if the agreement was signed prior to october 2013 additional regn charges are not applicable.

Extract from TOI:
People buying new apartments in the state will now have to pay 2% additional registration charges as the state has made registration of construction agreements signed between builders and buyers mandatory.

So far only the undivided share of land (UDS) was registered at sub-registrar offices, for which the government charges 5% stamp duty, 2% surcharge (for development of local bodies like corporations and panchayats) and 1% registration fees. Overall, for registration of a new apartment under construction, the buyer pays 8% of the value of UDS for registration. The construction agreement was never registered earlier.


Hereafter, the buyer will have to pay an additional 1% stamp duty and 1% registration fees on the cost of construction. Also, the construction agreement has to be registered at sub registrar offices within 120 days of signing the agreement. Without a registered construction agreement, UDS will not be registered. Necessary amendments have been made to the Registration Act and the new rules came into effect on October 1. Construction agreements signed till September 30 will not fall under the purview of the amended Act. However, developers and home buyers who claim exemption from the additional registration charges will have to provide proof before sub-registrars to show that their agreements were signed before October 1, said an official.

Confederation of Real Estate Developers’ Association of India (CREDAI) Tamil Nadu chapter president N Nandakumar said, “In terms of cost, there is an increase which customers have to bear. But there is a reward in the form of better title for their assets”. Till now, a registered deed used to be created for a new building only when resale of the property took place. A first buyer never used to get a title deed for his constructed immovable house in the state, unless the builder or the buyer insisted on registering the property after completion of the project. The only registered document one used to hold was the one for the UDS.

Times View

Making registration of construction agreements mandatory is a right step forward, taken with a view to providing better title deeds to apartment buyers. However, even with the present amendments to the Registration Act, Tamil Nadu has fallen short of providing title deeds to buyers for constructed apartments. In most other states, registrations of undivided share of land and constructed apartments are done together, at the time of handing over the flat to the buyer. Tamil Nadu needs to follow the same practice. The state should also reduce the stamp duty for registration from the present 7%, as prescribed by the Centre while disbursing funds under the JNNURM, to keep it uniform across the country.

 
Old October 3 2013, 01:52 PM   #12
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Quote:
Originally Posted by REC2013 View Post

I happened to buy a flat from one famous builder in Adyar starting with R way back in 1992 and found that there were 4 agreements
You need to agree that my clue was easy .

Quote:
Originally Posted by venkatama View Post
If I am deciding to purchase a Flat at cost 35 Lacs (20% borne by me-80% by bank - stage by stage to builder ) for a duration of 15 years, now how much addl cost by way of mortgage registration and 2% stamp duty and any other incidental charges the experts know off will help.
It all depends on UDS and Guidence value of the location.

UDS Registration -> 8% of (UDS*Guidance value)

Construction Registration -> 2% of Construction value.

Service Tax works out to around 4% of the construction value

Vat is around 2% . (Actually it is calculated item basis in real)


Document charges depending on builder

Infrastructure, development charges depending on builder varies from 25 per sq ft to 100 per sq ft

Property, water, sewage tax starts on possession every half year

If this is your second house worth more than 30 lakhs and not let out on rent then 1% wealth tax is applicable every year on idle assets. If you have a loan you can offset it against it's value.

Bank charges
------------------

Processing fee and legal charges as applicable with bank

service tax on processing and legal fee

Mortgage registration charges - 5100 + 0.5% of loan amount (Most bank ask for it). Some non PSU banks does not mandate it.

Few banks like Axis depending on one credit profile mandates home loan insurance. This is one another over head. In case if one has to take go for a single premium policy as if it is added to your loan amount the principal deduction portion is reduced.

As in katabomman dialogue "unnaku en kudaka venum kisthi". "Infrastructure kuduthaiya illai sewage connection than kuduthaiya". "Vazhikiradhu sewage, pallam anathu road", unnaku en kudaka venum kisthi.

But no choice our craze for RE assets land us into it.

Experts - Please add or correct on the above taxes

@sundarjp

Not sure of title deed really is that important in flats. One can always get EC post UDS registration. I have got EC for my flats.
chennaireal likes this.
 
Old October 3 2013, 02:12 PM   #13
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Please also advise, if this is a IInd property(Ist is located in remote location which has not appreciated much and not attractive - for which on Ist i have already enjoyed the principal/interest deduction from tax),

what is my claim on principal/interest deduction on the loan for the New property.

All these interest/charges are making our life more complicated and getting cazy :-( for just liking to be a house-owner then a tenant.
No relief et all.
 
Old October 3 2013, 02:25 PM   #14
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Quote:
Originally Posted by venkatama View Post
Please also advise, if this is a IInd property(Ist is located in remote location which has not appreciated much and not attractive - for which on Ist i have already enjoyed the principal/interest deduction from tax),

what is my claim on principal/interest deduction on the loan for the New property.

All these interest/charges are making our life more complicated and getting cazy :-( for just liking to be a house-owner then a tenant.
No relief et all.
appreciated/not appreciated has nothing to do with wealth tax. It is the market value of the property at the end of reporting year.

Below link gives the info you are looking for

Evading wealth tax is a criminal offence | Business Standard
 
Old October 3 2013, 03:06 PM   #15
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Quote:
Originally Posted by srivat
If this is your second house worth more than 30 lakhs and not let out on rent then 1% wealth tax is applicable every year on idle assets. If you have a loan you can offset it against it's value.
Value of the second house is immaterial, as long as the aggregate amount of unproductive assets adjusted for loan exceeds 30 lakhs - you will be liable. In this case, you will be taxed on notional rent when the apt is idle and hence apt being an unproductive asset does not arise.
 
Old October 3 2013, 03:57 PM   #16
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Quote:
Originally Posted by maverick007 View Post
Value of the second house is immaterial, as long as the aggregate amount of unproductive assets adjusted for loan exceeds 30 lakhs - you will be liable. In this case, you will be taxed on notional rent when the apt is idle and hence apt being an unproductive asset does not arise.
Agree.

Notional Rent -> Rental value for that applicable area.

I feel you can do either a notional rent or wealth tax depending on one's convenience.

Say if one is taken into 30% income tax bracket from 20% because of the notional rental income (After taking 30% maintenance expense and assume no loan). Wealth tax can provide an alternate to save on taxes in higher rental yield area. Say pretty old apartments still strong on apartments.

Now dont ask me for an example of such apartment. Just an option.

Am I right or missing something?
 
Old October 3 2013, 04:47 PM   #17
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Following assets are exempt from the purview of Wealth Tax:
a) any one residential property
b) commercial property
c) financial assets like shares, mutual funds, debentures.
d) any outstanding loan taken to buy the asset.
e) any residential properties which are rented for at least 300 days in a year. Remember that the rental income from such property is counted under Section 24 as "Income from House Property" and taxed under Section 24.

For resident Indians, net taxable wealth will include all assets in India and abroad whereas for non-resident Indians, net taxable wealth includes only those assets which are in India.

URL
 
Old October 3 2013, 04:47 PM   #18
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There will be some good news to cheer if changes suggested in DTC is accepted


Wealth Tax in India - Changes Suggested in Direct Tax Code

Following are few changes that have been suggested in direct tax code.

These changes may aid in bringing new reforms in wealth tax rates and calculations.

The threshold limit for wealth tax may witness a rise from Rs 30 Lac to Rs 50 Crores.

Fixed deposits, shares, mutual funds, corporate bonds, debentures etc may fall under the purview of wealth tax. These assets may get to be valued at market price or at their actual cost, whichever is lower.

The wealth tax rate may witness a change from 1 percent to 0.25 percent.

URL
 
Old October 4 2013, 10:18 AM   #19
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My question was - what is my claim on principal/interest deduction on the loan for the New property, I hope i got answered on wealth-tax :-)
 
Old October 4 2013, 02:10 PM   #20
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In case of a home loan taken for a self occupied property, the principal amount repaid up to 1 lakh qualifies for deduction under Section 80C; while up to 1.5 lakhs of interest paid is tax-deductible under Section 24.

This benefit gets reduced for second house. For the second house only the interest payment is eligible for deduction but there is no cap here as 1.5 lakhs.
 
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