Buyer’s Guide

Home Loan
You must be at least 21 years of age for the loan to be sanctioned. The loan must terminate before or when you turn 65 years of age. You must be employed or self-employed with a regular source of income.

Office premise loan

You must be at least 21 years of age for the loan to be sanctioned. The loan must terminate before or when you turn 65 years of age. You must be self-employed with a regular source of income. The loan can be for the purchase / construction / extension of a non-residential property. A loan for renovation or improvement will be given only at the time of acquisition of property. Professionally qualified and self-employed individuals can apply. A minimum of 3 year’s work experience is a must.

Loan Amount
A number of factors such as your income, age, number of dependants, qualifications, assets and liabilities, income stability/ continuity of your employment / business etc. are taken into account when assessing your repayment capacity.

However, there are ways by which you can enhance your eligibility: If your spouse is earning, add him/her as a co-applicant. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners they must necessarily be co-applicants. Did you know that your fiancée’s income could also be considered for sanctioning the loan on your combined income? The disbursement of the loan, however, is done only after you submit proof of your marriage. Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility. While there is no need for a guarantor, having one might enhance your credibility with us. If so, our loan officer would provide you with the necessary details. However, the final amount to be sanctioned will depend on your repayment capacity. In the total cost, registration charges, transfer charges and stamp duty costs are included.

Sanctioning
Documents required for applying for a home loan (for self-employed professionals and businessmen)

General Documents

  • Updated bank passbook or a Xerox of the statement of accounts for the last 6 months
  • Age proof: PAN card, Voters ID, Passport and License Xerox of ration card Business profile with details on the nature of business, list of clients, suppliers, staff strength, geographical spread, etc.
  • Xerox of education qualifications certificate and proof of business existence
  • Xerox of last 3 years Income Tax returns Last 3 years profit /loss and balance sheet Processing fees cheque
  • Documents required for applying for a home loan (for employed professionals)
  • Latest salary certificate / slip in original
  • Age proof: PAN card, voters ID, passport, license
  • Xerox of Form no.16 A (TDS Form) from employer. Certificate in original from employer for any other allowances, which are not reflected in salary slip
  • Updated bank pass book / Xerox of statement of accounts for last 6 months
  • Xerox of your company’s ID or ration card
  • Passport size photographs of applicant and co-applicant
  • Processing fees cheque
  • You may be asked to submit further legal documents if required by the bank or its approved lawyers. Retain photocopies of all the documents being submitted by you.

Disbursement
Your loan will be disbursed after you identify and select the property that you are purchasing and submit the requisite legal documents. Each and every single document asked for will be verified and checked for your safety. This may take some time but we want to ensure a clear title by completing all the legal and technical verifications so that you have full rights to your home. The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if applicable) is also needed. On satisfactory completion of the above, registration of the conveyance deed and investment of your own contribution, the loan amount (as warranted by the stage of construction) will be disbursed by Bank. The disbursement will be in favour of the builder/seller.

List of documents for disbursement

  • Loan Agreements
  • Disbursement Requests
  • Post-dated cheques
  • Personal guarantors documents, as the case may be

FAQs

Q: What are the documents that should be verified before buying a residential / commercial unit?

Ownership documents of land owner including title certificate.
Development Agreement, if the developer is not the owner and has acquired the development rights.
Intimation of Disapproval (IOD) and the building plan/s approved by competent authority.
Commencement Certificate.
Other permissions issued by the competent authority depending on the nature of plot/type of development.
If the construction is completed then Occupancy Certificate or Building Completion Certificate.
Draft of Agreement for Sale and brochure for specifications, layout and amenities in the flat/complex/layout.

Q: What documents are required to be executed if the intended purchaser wishes to proceed for purchase of premises?

The Developer shall execute an Agreement for Sale as per the provisions of The Maharashtra Ownership Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963 (“the MOFA”).

Q: What is the procedure for execution of the Agreement for Sale?

  • The procedure involved is three-fold:
  • Firstly, the payment of adequate stamp duty on the Agreement for Sale
  • Secondly, Execution of the Agreement for Sale by the Developer/Promoter and the Purchaser and;
  • Thirdly, Registration of Agreement for Sale.

We shall deal with the above aspect in detail as under:

(I)Stamp Duty

  • Unless there is an agreement to the contrary, the stamp duty shall be borne and paid by the Purchaser as per Section 30 of the Maharashtra Stamp Act, 2013.
  • As per prevailing laws, the stamp duty to be paid on the Agreement for Sale shall be an amount equivalent to 5% on the market value of the unit as per prevalent ready reckoner rates.
  • Market value means the price at which a unit could be bought in the open market on the date of execution of such instrument. This price is determined on the basis of the ready reckoner issued each year.
  • The Mode of payment of stamp duty is E-Payment through GRAS (Govt. Receipt Accounting System)

(II)Execution

  • After the payment of stamp duty on the Agreement for Sale, the same shall be duly executed by all the parties, i.e. the Developer/Promoter and the Purchaser/s. All the pages of the document should be signed by all the parties. The Agreement should be witnessed by at least two witnesses giving their full names, signatures, and addresses.

(III)Registration

  • The duly stamped and executed Agreement for Sale should be presented at the office of the concerned Sub-Registrar of Assurances for registration within 4 (four) months from the date of execution of Agreement for Sale.
  • In case of delay in presenting within the stipulated four months from the date of execution of Agreement for Sale citing unavoidable circumstances by the Parties, the Registrar may condone the delay after collecting penalty under section 25 of the Indian Registration Act, 1908; provided the delay in presentation of the executed Agreement for Sale does not exceed 4 (four) months from the date of expiration of the aforesaid stipulated 4 (four) months (i.e. does not exceed 8 (eight) months from the date of execution of the Agreement for Sale).
  • Registration of the Agreement for Sale is compulsory as per Section 17 of Indian Registration Act, 1908.
  • The registration fees shall be an amount being 1% of the market value of the unit, subject to maximum of Rs.30,000/-.

The material contained in this section is for general information only and is not intended to be an advice on any particular matter. The reader should seek appropriate professional advice before acting on the basis of any information contained herein.

Tax benefits

Purchasing a home on a loan is a lot more than pure happiness, you enjoy multiple tax benefits with it too! These benefits and exemptions not only help you save tax, but they also help in managing smooth cash flows.

Here are the deductions that income tax authorities offer to individuals who have taken a housing loan from specified financial institutions:

Under Section 24 of the Income Tax Act
The interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. Rs 2, 00,000 is the maximum amount eligible for deduction. In the case of self-occupied property and for rented out property, there is no limit on the amount of deduction.

Under Section 80C of the Income Tax Act
You can get a maximum Rs.1, 50,000 deduction from the Income, on repayment of principal during a financial year. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assesse is also considered under this amount. All these deductions should not exceed the overall limit of Rs. 1 lakh. However, deduction under Section 80C is not available in respect of payments made towards the cost of any addition, alteration, renovation or repair carried out after the issue of the completion certificate.

Non-resident Indians holding Indian passport do not require any permission from RBI for acquiring immovable property for bonafide residential purposes as section 31 of FERA 1973 is not applicable to them.
Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of NRO/ NRE/ FCNR account.
Foreign citizens of Indian origin are however required to declare the properties to RBI within a period of 90 days from the date of purchase in Form IPI 17. The following documents must be submitted along with the declaration. – A certified copy of the purchase deed or a certificate from the Co-operative Housing Society or an Association of the apartment owners as an evidence of transfer / registration of the property in the declarant’s name. – Certificate from the declarant’s bankers in India evidencing receipt of inward remittance(s) in foreign exchange through normal banking channel or withdrawal of funds from the declarant’s NRE/FCNR account/ FCNR Special Deposit Account and payment of consideration for the property out of those funds.
Where a Foreign Citizen of Indian origin wishes to acquire a property from the sale proceeds of another property, prior permission of RBI is essential and may be obtained by applying in Form IPI 1.
Any number of properties can be acquired by non-resident Indians regardless of whether they are holding Indian passport provided they are required for bonafide residential purposes.
Under Section 29 of the Foreign Exchange Regulation Act 1973, the Reserve Bank of India has granted General Permission to Foreign Citizens of Indian origin and Indian citizens residing outside India to let out their immovable properties (Commercial / Residential). The rental income or proceeds of any investments out of such income shall be repatriable outside India subject to Income tax being paid.

Home Loans

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act, 1973. Every bank and housing finance companies follow the RBI guidelines to define NRI – “An Indian citizen who holds a valid documents like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI.”
Broadly categorized, Non-Resident Indians qualifying for NRI housing loans are:

Indian citizens who stay abroad for employment or for carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad;
Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources;
Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP);
Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.

Documents required for Resident Indians as well as for NRIs for getting Home Loans are different in some respect. Home loans for NRIs are available for construction of new house / flats, purchase of old house / flat addition / alteration to an existing house and repairs / renovation etc. NRIs can avail of loans by mortgaging an existing residential property. However, for availing home loans, NRIs have to fulfil certain conditions according to provisions of the Income Tax Act. They should have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.

The FDI Policy that permits FDI up to 100% from foreign/NRI investor under the automatic route has boosted NRI confidence. Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs. From the stables of HFCs, NRI housing finance plans with suitable repayment options are available.

Last but not the least, NRIs should take due care while selecting their home loan provider companies or HFCs. Considering the geographical distances involved, it is significant that loan seekers associate with a proactive and responsive HFC.
Eligibility for NRI

The eligibility criteria of NRIs differ from Resident Indians based on a few parameters. The parameters include:

Age: The loan applicant has to be 21 years of age.

Qualification: The NRI loan seeker has to be a graduate.

Income: The loan applicant has to have a minimum monthly income of $ 2,000 (although, this criterion may differ across HFCs).The eligibility is also determined by the stability and continuity of your employment or business.

Payment options: The NRI also has to route his EMI (Equated Monthly Installments) cheques through his NRE/NRO account. He cannot make payments from another source say, his savings account in India.

Number of dependants: The eligibility of the applicant is also determined by the number of dependents, assets and liabilities.

An NRI applicant is eligible to get a home loan ranging from a minimum of Rs 5 lakhs to a maximum of Rs 1 crore, based on the repayment capacity and the cost of the property, which although is variable by the priorities of the home loan provider. Also Home Loan Tenure for NRIs is different from Resident Indians.An applicant will be eligible for a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land, based on the repayment capacity of the borrower.

However, a NRI can enhance his loan eligibility by applying for home loans with a co-applicant who has a separate source of income. Also, the rate of interest for home loans to NRIs is higher than those offered to Resident Indians. The difference is to the extent of 0.25%-0.50%. Some HFCs also have an internally earmarked ‘negative criterion’ for NRI home loans. As such, the NRIs who hail from locations that are marked as being ‘negative’ in the books of HFCs, find it difficult to get a home loan.
RBI directive loans

The Reserve Bank of India (RBI) has clarified that Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO), purchasing immovable property in India should pay for the acquisition by funds received in India through normal banking channels by way of inward remittance from outside the country.

The NRIs and Resident Indians can also acquire immovable property in India other than agricultural property, plantation or a farmhouse. It has issued certain directive for sanctioning home loans to Non-Resident Indians. The guidelines provided are:

The home loan amount should not exceed 85% of the cost of the dwelling unit, as the remaining amount that is 15% needs to be provided an own contribution towards the cost of unit financed.
The cost of dwelling unit which is own contribution financed less the loan amount, can be met from direct remittances from abroad through normal banking channels, the Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in India.
However, repayment of the loan, comprising of the principal and interest including all the charges are to be remitted to the HFC from abroad through normal banking channels, the Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in India.

The repayment option for NRIs as they can pay through the funds held in any non-resident account maintained in accordance with the provisions of the Foreign Exchange Management Act, 1999, and the regulations made by the RBI from time to time. As most of the home loan provider companies consider the economical stability of the applicant, home loans for NRIs are quite feasible, because they are well in economic resource.
Documents required for Loan

The documentation required to be submitted by the NRIs are different from the Resident Indians as they are required to submit additional documents, like copy of the passport and a copy of the works contract, etc. And of course NRIs have to follow certain eligibility criteria in order to het Home Loans in India.

Another vital document required while processing an NRI home loan is the power of attorney (POA). The POA is important because, since the borrower is not based in India; the HFC would need a ‘representative’ ‘in lieu of’ the NRI to deal with and if needed. Although not obligatory, the POA is usually drawn on the NRI’s parents/wife/children.

The documents needed for obtaining NRI home loans are:

Passport and Visa
A copy of the appointment letter and contract from the company employing the applicant.
The labor card/identity card (translated in English and countersigned by the consulate) if the person is employed in the Middle East Salary certificate (in English) specifying name, date of joining, designation and salary details.
Bank Statements for the last six months

List of Classified documents for Salaried and Self Employed NRI Applicants

Salaried NRI Applicants

Self-Employed NRI Applicants

Copy of valid passport showing VISA stamps

Passport copy with valid visa stamp

Copy of valid visa / work permit / equivalent document supporting the NRI status of the proposed account holder

Brief profile of the applicant and business/ Trade license or equivalent document

Overseas Bank A/C for the last 3 months showing salary credits

6 months overseas bank account statement and NRE/ NRO account

Latest contract copy evidencing Salary / Salary Certificate / Wage Slips

Computation of income, P&L account and B/Sheet for last 3 years certified by the C.A. / CPA or any other relevant authority as the case may be (or equivalent company accounts)

Property Documents:

Original title deeds tracing the title of the property for a minimum period of the last 13 years.
Encumbrance Certificate for the last 13 years.
Agreement of sale /construction, if any
Receipts for payments made for purchase of the dwelling unit.
Approved plan / license.
ULC clearance /conversion order etc.
Receipts for having invested the margin money through normal banking channels from the Non-Resident (External) account in India and / or the Non-Resident (Ordinary) account in India.
Latest tax paid receipt.
Allotment letter from the co-operative society / association of apartment owners.
Agreement for sale / sale deed /detailed cost estimate from Architect / Engineer for property to be purchased / constructed /extended / improved.
Copy of approved drawings of proposed construction/purchase/extension.

Additional documents to be submitted by Person of Indian Origin

Photocopy of PIO card.

If the PIO card is not available, photocopies of any of the following documents:

The current passport, with birthplace as ‘INDIA’
The Indian passport, if held by the individual earlier.
Parents/grandparents Indian passport/birth certificate/marriage certificate substantiating the individuals claim as a person of Indian origin.

Q: Do non-resident Indian citizens/ foreign citizens of Indian origin require permission of Reserve Bank to acquire residential property in India?

A: Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain permission of Reserve Bank.

Q: In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?

A: The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.

Q: Are there any formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?

A: They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

Q: Can such property be sold without the permission of Reserve Bank?

A: Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.

Q: Can sale proceeds of such property if and when sold be remitted out of India?

A: In respect of residential properties purchased on or after 26th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.

Q: Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?

A: Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.

Indians living in UK can contact us at:
22 Hanover Square, Mayfair, W1S 1JA
Phone: +44 (0)20 37058425
Email: enquiry@indiabulls.com

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Monthly Payment (EMI)

Rs.24,959

Total Interest Payable

Rs.34,90,279

Total Payment
(Principal + Interest)

Rs.59,90,279


Contact No.

City New Customer Existing Customer
Mumbai +91 22 39647500 1800 3000 7755
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+91 9560761115
+91 9873500313
+91 124 6682812
+91 124 6682851
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+91 9818805513
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United Kingdom
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+44 (0)20 37058425

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