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Overview of Property Registration

Registration of property is a legal requirement to be followed when a person purchases certain defined land or property in India. There are well-stablished laws to govern the purchase and registration of property in India. Registering a property involves selling a property to another and getting it recorded to the competent government authority for ownership purposes. Registration of property helps the owner to prove his clear title to the property, which is free from any pending litigations or claims to the property. It is also mandatory for the buyer to pay the registration fee and stamp duty, which is calculated as per the market value of the property. The necessary papers are arranged as per the stated order under the law and submitted before the Sub-registrar's office for the registration of property. The registration of the property is a mandatory step to protect the interest of both the parties to the contract, .i.e, the Buyer and the seller.

Registration of property is done whenever a person sells or purchases the property. If the registration is not made when the property is sold to a person, it might cause problems for the present owner of the property. It will also create problems for the owner for seeking any protection or justice before a court of law.

Is Property Registration Mandatory?

As per the provisions stated in the Registration Act of 1908, the registration of the property is mandatory when the value of the property is more than Rs.100. This has been defined under Section 17 of the Registration Act. The property is sold to the person who has the clear title to the property once all the legal requirements, such as payment of stamp duty and registration fee, has been made duly. The amount of stamp duty and the registration fee varies from state to state as per the state laws made for such purposes.

Laws on Registration of Property

The below-mentioned laws are the laws related to the registration of property in India. These are:

  • As per Section 17 of the Registration Act, 1908, it is mandatory for immovable property to be registered whose value is above Rs.100 when it is being sold.
  • As per the provisions established under the Indian Stamp Act 1889, it is mandatory for the buyer to pay the stamp duty on the Documents required for the registration of the property.

New Rules for Property Registration in India

In the year 2020, the government came up with a set of rules for the registration of property. The rules are applicable to the registration of properties. These are:

  • The copies of the Documents will be made available to the parties on the same day with the availability of advanced technology and an electronic device.
  • A property which is not registered will not be considered valid evidence.
  • The government which has acquired an unregistered property will not be able to claim compensation under the provision stated under Section 80C of the Income Tax Act.

Benefits of Property Registration

There are several benefits of registration of property, even if it is one of the most time-consuming tasks. The benefits overcome the value of the time being spent on the registration process. The advantages are as follows:

  • If the owner's property is registered, then all the information about the property, along with its value, can be accessed by the sub-registrar's office.
  • Getting one's property registered saves one from any illegal claims over the property, and land disputes can be solved effectively.
  • While the registration process is going on and the registrar commits any mistake or cause an error during such registration, the buyer will be compensated by the government for any losses suffered due to the error.
  • The seller of the property is entitled to several tax benefits, such as tax deductions under Section 80C. The pre-requisite for availing of such tax deduction is that the property must be duly registered at the registrar's office.
  • Mutation of the property becomes an easy process if the property is registered.

Checklist for Property Registration

The process of registering a property is a time-consuming process involving a lot of complicated procedures. A Document submitted wrongly might consume more time than required. Thus, it is important to keep in mind certain points and prepare Documents before submitting the Documents to the registrar. These are:

  • Documents: It is the responsibility of the buyer to ensure that all the Documents required for the registration of the property are available with the buyer at the time of registration.
  • Clearance of Pending Bills: The buyer should check that all the bills due before the sale has been made are cleared on the part of the seller.
  • Stamp Duty: The amount of stamp duty must be calculated, keeping in mind the market value of the property. The amount varies from state to state as every state has its own Act with regard to stamp duty.
  • Preparation of the Document: It is necessary for the parties to enter into an agreement such as a sale deed, lease deed or gift deed stating all the essential terms and conditions for the sale.
  • Encumbrance: It is a certificate stating that there is no mortgage or any legal dispute pending on the property being purchased by the buyer. It is the responsibility of the buyer to verify the encumbrance certificate before entering into a contract.

NGDRS: National Generic Document Registration System for Property Registration

NGDRS stands for National Generic Document Registration System for Property Registration. It has been initiated by the Department of Land Resources, the Ministry of Rural Development, and the Government of India. It has been developed into an application for the registration of properties in India.

The application has been designed specifically to be used by the sub-registrar, the citizens and other people from various state registration departments. The application has been developed in a way that it can be modified as per the requirements of every state, depending upon various factors.

The application offers a complete and user-friendly interface for the registration of property and submission of Documents. The application also allows citizens to initiate the buying and selling of properties/land online. It provides its users with several options, like finding out the prevailing market rates of certain properties and the nature of the land available for sale.

Documents Required for Property Registration

Drafting and submission of Documents is an essential requirement during the registration of a property. Documents are required to be submitted to record the details of the property and transaction in the government system. There is a list of Documents which should be kept readily available to the person who is willing to get the property registered. The list contains Documents like:

  • Passport-size photograph of the buyer
  • Passport-size photograph of the seller
  • Identity proof such as Aadhar and PAN Card of both the parties
  • The latest copy of the property card
  • Power of attorney, if any
  • Municipal tax bill copy
  • NOC (No Objection Certificate)
  • Copy of a verified sale deed
  • A certificate stating that the construction has been completed
  • Stamp duty and registration fee payment slips

Property Registration process

There are a few instructions which are required to be followed while registering a property/land in a state. These instructions are:

  • The value of the property should be estimated on the circle rate in the area where the property has been situated.
  • After the value of the property has been calculated, there is a need to purchase a non-judicial stamp paper. Such paper can be purchased online or offline through a vendor have a license to sell stamp papers.
  • The deed must be typed on the stamp paper purchased, considering the nature of the transaction between the parties. The nature of the transaction can be a lease, gift or sale of property, etc.
  • It is necessary for both parties to approach the sub-registrar's office along with two witnesses for registration of a deed. Both parties are required to keep photographs, IDs and other important Documents with them to the sub-registrar's office for registration purposes.
  • One needs to pay the charges for registration of property before registration of the property.
  • After the Documents have been submitted to the sub-registrar's office, they are verified for ensuring that the Documents are real and valid. After the verification is successful, a receipt is issued to the parties after the deed has been duly registered.

Online Property Registration

With the help of advanced technology available in India, the government has come up with a portal where one can register a property through online mode. As of now, this service is limited to only a few states. A person can make online payments through net banking or any debit or credit card, etc. One can calculate the amount required to be paid as registration fee and stamp duty and make payment. A receipt is generated for the payment made to the buyer of the property.

Guidelines for Online Property Registration

The service of registration of property through online mediums is available in limited states only. Thus, it is important to check certain things before applying for registration of property through online mode. These are:

  • The buyer needs to ensure that the state in which the buyer is willing to purchase the property has an online property registration portal available or not.
  • The buyer needs to check certain details with the help of such an online portal. These are:

    Check the amount of stamp duty to be paid.

    Payment of registration fee and stamp duty online.

    Receipt of online payment.

  • The buyer needs to go to the registrar's office to complete the process of registration along with the payment receipt.
  • It is necessary to pay a 1% TDS online if the value of the property exceeds Rs. 50 lakh.
  • The buyer needs to provide information such as name, address, nature of the property, the status of the owner, details of the property and proof of property for registering a property online.

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Types of Valuations for Property Registration

It is mandatory for a buyer to pay the registration fee and register a property at a certain value. There are different methods for the valuation of property registration. These methods are:

  • The most common type of valuation of property for its registration and payment of registration fee based on the market value of the property. It is the value at which the buyer agrees and buys the property from the seller.
  • If the value of the property is greater than the circle rate of the property, then the buyer can register the property based on its market value.
  • But, if the market value of the property is lower than the circle rate of the property, the buyer can register the property based on the market value of the property. In such a case, the difference amount between the market value rate and the circle rate will be taxable as such amount will be considered as income to the buyer.
  • Bank valuation is another method for the valuation of property registration. The banks suggest its borrowers for registering their properties at a full property value or higher.
  • The buyer can also register a property at the value stated by the developer of the property in the construction agreement. It will also help in reducing the amount of stamp duty.

Factors Affecting Property Registration Charges

There are several factors which affect the registration fee of a property. These factors are:

  • The nature of the property plays an important role while the calculation of the fee. If the property is being purchased for commercial purposes, a higher rate is charged as the such property includes other additional facilities. Whereas property being purchased as residential property has fewer charges as compared to commercial one.
  • Depreciation and age of property are important aspects while deciding the registration charges. The charges for a new property are high and comparatively low for an old property as the value of the old property gets depreciated from time to time since it was constructed.
  • The amount of the registration fee is less when the ownership of the property is transferred to any family member by means of a gift deed. Whereas, in cases of the sale of the property to a person not belonging to the family of the seller, a standard amount is charged as a registration fee.
  • The location of the property is an important aspect while the registration fee is being calculated. The amount is high when the property is situated at a place close to public facilities such as a metro or a railway station, etc. In general, the registration amount is high when the property is located in a metro city or a developed town.
  • The government has laid down a provision with regard to the female owners of the property. If a certain property is registered under the name of a woman, then the discount is provided by the government.
  • If the property has additional facilities such as a swimming pool, gym, clubhouse or library, etc, the registration charges are high.

Issues Faced in Online Property Registration

The registration of property by online mode is an effective means of registration, but it comes with several disadvantages which create problems for buyers and sellers. Sometimes, the online registration portal works slowly causing a huge waste of time. The website also faces several technical glitches. This is one of the common issues faced by users. Even if the process of registration of property has become online, one needs to visit the office of the sub-registrar to submit Documents and finish the process. Registration of property is mandatory in nature as defined under the Registration Act, 1908.

Frequently Asked Questions

The provision has been stated under the Registration Act, 1908 in India for the registration of property.

The Circle rate is the minimum rate of the property which has been decided by the government's revenue department and is considered at the time of transfer of property be it a commercial or residential place.

The general time limit for registration is 4 months. The parties are required to submit all the Documents required for registration within the prescribed time period.

Non-registration of the property restricts the owner to prove his ownership of the property. If the property is acquired by the government for development purposes, the owner will not be able to claim compensation for the property.

The Documents essential for the registration of the property are as follows:

  • Aadhar card and photograph of both the parties
  • Copy of the deed
  • No objection certificate
  • Register card of the property
  • Copy of the payment of municipal tax bills
  • Completion certificate by the developer

The registration charges are not fixed under any law. It varies from property to property as the amount is calculated considering the market value of the property. Usually, the registration charges are 1% of the market value of the property.

Yes, the registration of land or property can be made online through a well-developed government website. Such service is not available to all the states in India. Even if the process is online, the parties need to visit the sub-registrar's office for certain required purposes.

Any property whose value is more than Rs.100 is required to be registered as per the Registration Act.

Yes, the government gives a discount on the registration fee if the property is registered under the name of a woman.

Yes, it is mandatory for both parties (seller and the buyer) along with 2 witnesses to be present at the time of registration of the property.

Yes, in cases where there is an error in the application, the amount of stamp duty is insufficient or some of the necessary papers are not available at the time of registration, the sub-registrar can cancel the application.

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