Selling land in India is a process that requires the right guidance. We have you covered with the legal processes, market strategies, and essential tips. Understand the complexities with confidence for a successful land sale.
Introduction for Selling a Plot of Land
Selling land in India involves a few key steps. Firstly, a verbal agreement between the buyer and seller is made after physical inspections and price negotiations. Next, hiring a lawyer is advisable to prepare a legally binding contract based on the verbal agreement, avoiding miscommunication. To sell a plot of land online, it’s crucial to pay the state-specific stamp duty (around 3 to 7 per cent) after the deed is finalised. The important step follows: executing and registering the sale deed at the sub-register office with necessary documents, including ID proof and land photographs. Property mutation, changing title entries in local records, requires a visit to the municipal office.
Registration charges, ranging from 1% to flat rates, differ by state. Buyers bear the stamp duty and registration charges, while sellers are subject to capital gains tax on the sale proceeds. Different metro cities like Bangalore, Mumbai, Delhi, and Chennai have varying percentages for property market value charges, such as 1% in most and 1.1% in Kolkata.
Ensure a smooth process to sell a plot of land by understanding these steps and state-specific regulations.
Key Considerations for NRIs Selling Property in India
Selling property in India as an NRI comes with its set of considerations. While investing in Indian real estate is an appealing prospect, navigating the sale process requires careful planning, especially in terms of tax implications. NRIs, who have significantly contributed to the Indian real estate market, must grasp the intricacies to ensure compliance and optimise their returns.
Taxation Guidelines for NRIs:
Understanding taxation rules is paramount for NRI sellers. Capital gains from property sales are subject to taxes, with Short-Term Capital Gain (STCG) tax rates applicable within two years of purchase. The STCG is calculated based on the NRI’s income tax slab rates. Long-Term Capital Gain (LTCG) tax, at a rate of 20%, applies to property sold after two years. Calculating both short and long-term gains involves straightforward formulas, ensuring clarity in the taxation process for NRIs.
Different Types Of Property in India
Properties can be classified as movable property and immovable property. The first is the movable property and immovable property. Immovable properties are mainly land and houses. We can classify the houses into different categories such as bungalows, apartments, villas, etc. The stamp duty of these properties differs depending on the property’s valuation.
Property Transfer
Ownership of property can be transferred in two ways:
Voluntary transfer- when the owner transfers the property willingly by gifting or by signing the will. It is called the voluntary transfer of immovable properties.
Involuntary transfer- It happens when the transfer of property happens without the explicit consent of the owner. It usually happens in cases of divorce decrees, failure to pay property taxes, asset seizure in case of debt default, and due to natural disasters. Get the Land Registration Documents Online with our Online Portal
Below are the five ways of transferring legal plots in India:
- Through inheritance or will.
- Through enabling the co-owners to legally transfer their property’s share to another co-owner of the property.
- Through settlement or partition of properties.
- Through gifts.
- By purchasing the ownership of the property.
Types of Deeds in India
Sale Deed: The Sale deed is the most popular way of transferring property in India. Suppose you own land you want to sell, and then you can consider the execution of the sale deed. Registration of the sale deed with the sub-registrar office is mandatory. Once it is done, the ownership gets transferred to the new party.
Gift Deed: Gift deed is used when someone wants to gift a plot or a house to some of his blood relatives. You can learn about the Deed Format for Gifts from our expert team. In the case of land or house, it has to be registered the gift deed as per section 17 of The Registration Act, 1908.
Relinquishment Deed: When there are multiple plot owners, and one of the co-owners wants to transfer his share to one of the other co-owners, then this can be done with a relinquishment deed or release deed.
Partition Deed or Settlement Deed: It is generally executed by the co-owners of land when a court order or order of any local revenue authority.
Will Deed: You can own land through inheritance or will registration. When a person dies, the property is transferred according to the will of the deceased person.
Documents Needed For Plot Registration
There are certain documents required at the time of plot registration, such as:
- Identification proof.
- Two passport photographs of both parties.
- Sale deed.
- Power of attorney if any one of the parties cannot be physically present at the registration time.
- If the party is a company, a copy of the resolution of the company’s board is needed, along with a power of attorney.
- Property card.
- Receipt of stamp duty and registration fee.
Along with all these documents, you must submit the deed’s original copy to the sub-registrar office: one original and two sets of photocopies. If you can not submit all these documents at the time of registration, then there is a period of 4 months from the date of execution within which you have to submit them to the sub-registrar office.
Benefits Of Plot Registration
When you buy a plot, it is your duty to hold it for your future endeavours. It is always advised to register your plot to protect it. It assures against any type of encroachment and other legal litigations. It provides documentation or maintains records about the plot with the government agencies, which protects your ownership over the plot. So, any time you want to invest in land/plot, it is necessary to register it to get your legal title over the land.
Conclusion: How To Sell A Plot Of Land In India?
The process to sell a plot of land is not an easy job in any country. It involves a lot of paperwork along with a great amount of time. Earlier it was not that tough to deal with this type of situation, but nowadays, because of the current situation in the market prices and increased number of documentation, the process of selling plot has become much more complicated and time taking. It may take years to find the best suitable deal for you. With technology booming, people can use several web portals to promote their plots, which are available for sale. Vakilsearch brings a comparative blog post for people who are in the process of selling their plots. For any more information or legal help please get in touch with the experts from Vakilsearch.
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