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FAQs & Glossary

Floor Space Index(FSI) means the quotient of the ratio of the combined gross floor area of all floors excepting areas specifically exempted under these Regulations to the total area of the plot.

Basic sale price is the basic price of the property. This cost does not include other charges like EDC/IDC/IFMS/EEC/PLC/Club membership and car parking.

Per Square Feet.

BWSSB stands for Bangalore Water Supply and Sewerage Board and KPTCL stands for Karnataka Power Transmission Corporation Limited.

Developers have to pay these charges to the government for civic amenities such as roads, water/electricity supply, sewerage and drainage. The development charges are fixed by the local authorities and are passed on to buyers in proportion to the built-up area of their properties.

PLC (PREFERENTIAL LOCATION CHARGE) is the extra charge paid to a unit which has a better location within a particular layout or complex.

One time charge levied by developer to maintain the society. This is a common pool of funds which works as a maintenance charge.

EEC is external electrification charge and FFC is fire fighting charge and these are levied for obvious reasons.

Common Area Maintenance which includes hallways, pathways and utilities. CAM fees is accumulated by the landlord from tenants to cover maintenance.

The maximum amount of construction allowed on a given plot of land. This is purely dependent on the plot area and would vary from one locality to another based on different factors.

Sale Deed provides the buyer an absolute and undisputed ownership of the property.

Built-up area denotes to the entire area of the floor including carpet area, walls, lobbies/corridors, atrium areas and basement.

The actual usable area within the walls of the unit is Carpet area.

Super built-up area includes common amenities, such as the area of lift shafts, lobby, and corridor, proportionately divided among all flats. The common usable areas, such as a swimming pool, garden and clubhouse may also be included in it.

Rule 34 of the Development Control Regulations for Greater Bombay,1991 defines TDR which stands for Transferable Development Rights as under: ‘In certain circumstances, the development potential of a plot of land may be separated from the land itself and may be made available to the owner of the land in the form of Transferable Development Rights. These rights may be made available and be subject to the Regulations in Appendix VII hereto. Appendix VII lays down the rules for the grant of Transferable Development Rights to owners/developers and conditions for grant of such rights: 1. The owner (or lessee) of a plot of land which is reserved for a public purpose in the development plan and for additional amenities deemed to be reservations provided in accordance with these Regulations excepting under certain conditions shall be eligible for the award of TDR in the form of Floor Space Index(FSI) to the extent and on the following conditions set out below. Such award will entitle the owner of the land to FSI in the form of a Development Rights Certificate (DRC) which he may use himself or transfer to any other person. 2. Subject to Reg.1 where a plot of land is reserved for any purpose specified in S.22 of Maharashtra Regional and Town Planning Act,1966 the owner would be eligible for DR’s to the extent stipulated in Rules 5 & 6 in this Appendix after the said land is surrendered free of cost or after completion of development. 3.TDR’s will be available only for prospective development of reservations. 4.DRC’s will be issued by the Commissioner himself giving details of FSI credit. 5.The built up area for the purpose of FSI shall be equal to the gross area of the reserved plot to be surrendered. 6.When the owner or lessee also develops or constructs the amenity on the surrendered plot at his cost, he may be granted a further DR in the form of FSI equal to the area of the construction/ development done by him.

Formerly leave and Licence agreements used to be signed in multiples of 11 months or 12 months. After The Maharashtra Rent Control Act,1999 came into force from 1.3.2000 there is no stipulation as to whether leave and licence agreement should be in multiples of 11 or 12 months, and there is no stipulation as to total time period.However Leave and licence agreement generally does not exceed three years. But the new rule effective from 7th May 2005 states that you can do a leave and Licence agreement now for a period upto 5 years and in multiples of 12 months each.
As per Section 55 of the Maharashtra Rent Control Act,1999 registration of Leave and Licence Agreement is compulsory and it is the responsibility of the landlord to ensure registration. If the same is not registered, the landlord would be prosecuted and on conviction he’s subject to upto three months imprisonment or be subject to fine not exceeding Rs.5000/- or with both. Further in the absence of a Registered Agreement, the contention of the tenant, about the terms and conditions on which the premises have been given to him by the landlord shall prevail unless otherwise proved.
a) Purchase from builders b) Resale flats -Society not registered c) Resale in a Registered Co-op Society (Conveyance in favour of Society completed) d) Resale in a Registered Co-op Society (Conveyance not completed through administration by Society.) Answer (i) Registration of agreement for sale/documents of ownership flats when ownership flats are purchased from builders, one should register such agreements with the Sub-Registrar. (ii) In case of resale of flats in a society which is not registered, the registration would be required. (iii) In case of resale of flats in a registered Co-operative Society no registration is compulsory as per section 41 of the Maharashtra Co-operative Societies Act, 1960. However, some societies do insist that such documents be registered. (iv) It does not really matter whether conveyance has been granted to the society or not since it is only a change of membership which takes place in a society. Thus the answer to (c) above is relevant even where no conveyance has been granted in favour of a society. (v) The Registrar of Co-operative Societies has issued some time back a circular to societies whereby he has stated that all documents for transfer of flats be registered. However, under section 41 of the Maharashtra Co-operative Societies Act registration is not compulsory in case of sale of flats in societies but in view of the aforesaid circular some societies do insist on registration. (vi) The Bombay High Court has held that transfer of shares in a co-operative society is in fact transfer of immovable property for the purpose of stamp duty. However, section 41 of the Maharashtra Co-operative Societies Act is still valid and two issues involved here are different. Section 41 deals specifically with regard to the registration issue as stated above.
On the proposed sale of your flat you may purchase another flat within two years of the date of sale of the original flat. If you have invested the entire amount of capital gain irrespective of your area of the flat, you would not have to pay any capital gains tax.
The Income Tax Act has made provision under sections 54, whereby you can claim exemption from tax on capital gains. Section 54 – Purchase or construct another residential house worth the amount of capital gains. Section 54 protects capital gains arising out of sale (or transfer) of a residential house whether self-occupied or not, provided the assessee has purchased within 1 year before or 2 years after the date of sale of the original asset or has constructed within 3 years after that date, a residential house. The only condition is that the newly-acquired property should not be sold within 3 years from the date of its purchase or construction. If this condition is not satisfied, the cost of the new asset is to be reduced by the amount of long-term capital gains exempted from tax on the original asset and the difference between its sale price and the reduced cost will be chargeable as short-term capital gain earned during the year in which the new asset is sold. This condition is unfair.
Yes, it is safe to give ownership flat for leave and licence provided an agreement has been entered into to that effect and the same leave and licence agreement has been registered with the Competent Authority under the Maharashtra Rent Control Act,1999.
In those residential and commercial properties owned by you and occupied by people who are not paying rent you may serve a notice in writing to the tenants for demand of the standard rent in the manner provided in Section 106 of the Transfer of Property Act,1882(IV of 1882) and after expiry of 90 days and the rent has yet not been submitted by the tenants you may then file a suit for eviction of the tenants under the Maharashtra Rent Control Act,1999 and recover possession of the tenanted premises under Section 16 of the said Act.
Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws.
Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers’ NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.
Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., and authorised dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investors‘ NRE/FCNR/NRO accounts.
While buying a flat from a builder in a building under construction, check the following: • The builder has approval on the building plan along with the number of floors • and approval on the floor, on which your flat is situated. • Verify the documents for the ownership of the construction site. In case, the • builder is not the owner verify the written agreement with the landlord, and • check the title of the land ownership with the help of an advocate. • Check the building bylaws as applicable in that area, and ensure that the • builder is doing the construction without any violation of front setback, side • setbacks, height etc. • Check specifications given in the agreement to sell off the Sale Brochure. • Check the reputation of the builder. • The builder has obtained Urban Land Ceiling NOC (if applicable) and NOC from • Water & Electricity Authorities.
Regarding the authenticity of documents, you have to take the help of an advocate for verification.
A freehold property (plot or a flat) is one where there is a whole and sole owner(s) ownership is full and unconditional (within the provisions of the laws of the land) and there is not lessor/lessee involved.
The Sub-Registrar of the area in whose jurisdiction the property is located is the appropriate authority for knowing the market value of the property.
The market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the ready reckoner(a government published guide on property rates in all areas) value which ever is higher.
No, it is not necessary that the loan should be taken only from housing finance companies. One may take loan from any company or person, even from family members.
If the TDR is purchased in the name of the society it is always better as it acts as another safety buffer for the society. However, the society should be cautious about the stamp duty implications. Specific income tax implications would be based on the facts of the case and on the manner in which the transaction is structured and the documents drafted. In general, one can take a view that the redevelopment should not attract income tax in respect of the compensation and consideration receivable from the developer. Compensation is not income and when the consideration is received for sale of an asset having no cost of acquisition, tax would not arise. The facts of the case and applicable legal provisions should be brought out very clearly in the development agreement so that the tax liability is Zero can be proved to the satisfaction of the authorities. In redevelopment, the society is the owner of the land and building before commencement of redevelopment and continues to be so after the redevelopment. On such analogy, recently the Hon’ble Mumbai Tribunal has ruled that there is no income tax on such development agreement in the case of the Sailaja Co-operative Housing Society Ltd. whose case was represented by this writer. When a newly constructed flat is received in place of the old one, for the purpose of computation of income tax liability, the period of holding should be computed from the date of original acquisition and therefore the same would commence from 1984 in your case. The cost of improvement should be considered from the date of improvement.
All the above referred documents are required to get the conveyance of land and building. In extreme cases, if the above documents are not available and if the society can impress upon the authorities alternative documents like the assessment bill from BMC or getting the plan prepared by an architect on the basis of existing structure or a reply received from BMC about the non-availability of documents, it will be sufficient to get the conveyance. This depends upon a case-to-case basis and is not the general rule.
If the land under consideration is agricultural and if one intends to develop the said land for residential/commercial/industrial use, then such agricultural land has to be converted to non agricultural land and a Non Agriculture Order has to be obtained from the Collector of the District where the property is located. Along with this, one needs to take the latest receipts evidencing payment of Non Agriculture Tax. In cases where the conversion from agricultural use to non-agriculture use is not done within the stipulated period then, there should be an order from the concerned authority extending the period.
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