Category: Property Tax

A Ready Reckoner Rate (RRR) is the standard value of an immovable property assessed and regulated by the respective State government in which the property is established. Here, the word immovable property encompasses residential property, commercial property, and land/plot. In a bid to ensure an accurate valuation of real estate properties, all the State governments publish area-wise rates of properties on a yearly basis known as Ready Reckoner Rate (RRR). Also, referred to as Circle Rate, a RRR differs across States, cities, and localities. The RRR acts as a benchmark below…

There are several charges that go into making the total cost of an apartment. From parking space charges to club membership costs, here is more. We have compiled a list of the general hidden cost of buying a home, flat or apartment. One must be aware that there are several hidden cost of buying a home over and above the advertised price of the property. While the hidden costs may vary from one society to the other, inevitably every property will have several cost factors. In some cases, these costs may…

Any difference between the agreement value and the ready reckoner value of a property, has implications, not only on the stamp duty payable but also on the income tax of the buyer and seller When you enter into an agreement to buy a property, you have to pay stamp duty to the government. The amount of stamp duty is generally based on the value of the property mentioned in the agreement. To avoid evasion of stamp duty through undervaluation of agreements and to minimize the disputes on the quantum of stamp duty,…

The government levies a compulsory tax on the transfer of rights in a property, known as ‘stamp duty’. We examine how it is calculated and ways to save money on this tax amount The government levies a tax when there is a transaction of property (i.e., when a property changes hands, from the seller to the buyer). This tax is known as ‘stamp duty’. It is levied on residential and commercial property transactions, as well as freehold or leasehold properties. Stamp duty is levied by states and therefore, the rate varies…

Stamp duty is mandatorily payable upon registration or transfer of property. Those investing their money need to be cautious about future obligations and such clauses Stamp duty is a compulsory obligation payable on the document which encapsulates the transfer of immovable property, such as real estate. Homebuyers are required to pay this when registering the agreement for sale. “Different rates of stamp duty are payable in different states, depending on the legislation prevalent in that state,” points out Ameet Hariani, managing partner, Hariani & Co. “In Maharashtra for instance, the Maharashtra Stamp…

What is a family settlement and how does it impact your tax liability, with respect to the properties that are involved in the settlement? We explain… Disputes, settlements and arrangements within a family over property, have been a part of human civilisation. The war of Mahabharat happened due to a family dispute over property, which could not be resolved by a settlement or arrangement that was agreeable to all the parties. As the size of a family grows, it is inevitable that some of the branches of the family may choose…

Rental properties are presently subject to service tax, under certain conditions. We examine how the proposed Goods and Services Tax and the provisions for tax deduction at source, will impact one’s rental income The rental income from a real estate investment, is taxed under the head ‘Income from House property’ under the income tax laws, which is a direct tax law of the country. Properties that are let-out, are also subject to indirect taxation in the form of service tax, presently. The lessee of the property is also required to deduct…

As the law allows a person to own multiple homes and avail of multiple home loans, we look at the implications on tax exemptions on the home loan for the second house There is no restriction on the number of properties you can own. Similarly, there is no restriction on the number of houses for which you can take home loans and claim tax benefits, either under the tax laws or banking laws. However, the amount of home loan available to you for all the properties taken together, shall depend on various factors…

While a gift of house property does not involve monetary consideration, it needs to be registered and taxes should be paid in certain cases Gifting is an act, through which a person voluntarily transfers certain rights in an asset to another person, without any consideration. Gifting of house property has a certain income tax and stamp duty implications. Legal requirements for the gift of property As per the Transfer of Property Act, the transfer of a house property under a gift has to be effected by a registered instrument/document, signed by…

Properties can be transferred to someone you love, without any consideration, by way of a gift or through a will. We examine the pros and cons of each method Transfer of property by way of gift If you wish to transfer property, so as to make the donee enjoy the property immediately, this can be done by way of a gift. You can gift a self-acquired property to anyone, as long as you are competent to contract, as per the provisions of the Indian Contract Act. Any person who is of…