It is tax, similar to sales tax and income tax collected by the Government, and must be paid in full and on time. If there is delay in payment, it attracts penalty. A stamp duty paid instrument/ document is considered a proper and legal instrument/ document and such gets evidentiary value and is admitted as evidence in courts. Instruments /documents not properly stamped are not admitted as evidence by the court.

Before buying property, it is advisable to appoint a solicitor to inspect the original title documents of the property being purchased. If the title is not clear, the number of complications arising in future may be numerous. For eg., no bank would provide a loan against a property not having a clear title, it may be difficult to transfer share certificate of the society in your name, selling of property will not be simple, etc. The following is a check list of documents that you should verify before buying a property

Please note that the loan process terms/conditions vary between resident Indians and NRI's (Non resident Indians). Please consult with your financial institution for latest and applicable terms. The information provided here is just for the reference of the borrower.

Finance plays an important role in the purchase of an apartment/home/property. The following are couple options to arrange finance to the property.

Home Purchase Loans: This is the basic home loan for the purchase of a new home.

Home Improvement Loans: These loans are given for implementing repair works and renovations in a home that has already been purchased by you.

Home Construction Loan: This loan is available for the construction of a new home.

Home Extension Loan: This is given for expanding or extending an existing home. For e.g.: addition of an extra room etc.

Home Conversion Loan: This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of pre-payment of the previous loan.

Land Purchase Loans: This loan is available for purchase of land for both construction and investment purposes.

Bridge Loans: Bridge loans are designed for people who wish to sell the existing home and purchase another one. The bridge loans help finance the new home, until a buyer is found for the home.

Balance Transfer Loans: Balance transfer loans help to pay off an existing home loan and avail the option of a loan with a lower rate of interest.

Refinance Loans: This loan helps you pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present home.

Stamp Duty Loans: This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.

Home loans are available on fixed rate of interest and floating rate of interest. In fixed rate loans, the interest rate remains fixed over the life of the loan, irrespective of the interest rates in the open market. The plus point of fixed rate loans is that they remain steady over the years, making at least one aspect of your monthly cash flow predictable. But the flip side is that the lenders charge a higher rate of interest for fixed-rate loans because if interest rates shoot up, they lose the opportunity to make more money on the funds they are lending

In floating rate loans, the rate of interest changes according to a set formula as interest rates fluctuate in the open market. The plus point is that lenders charge a lower rate for such loans because you are taking on some of the interest-rate risk. The downside is that interest rates may rise anytime and you can end up paying more than fixed rate loans

Your repayment capacity will help decide how much you can borrow. Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history.

There are usually two schemes available, (a) Fixed Rate Loans (b) Adjustable (Variable) Rate Loans. Under the Fixed Rate Home Loans the rate applicable on the date of disbursement remains fixed during the entire duration of the loan.

You repay the loan in Equated Monthly Instalments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.

Pending final disbursement, you may pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement upto the date of commencement of EMI.

Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Interest repayment of Rs. 75,000 p.a. (for a loan on or after April 1, 1999) can get you a tax saving upto Rs. 25,000 p.a. Moreover, you can get added tax benefits under Sec 88 on repayment of principal amount upto Rs. 10,000 p.a. which can further reduce your tax liability by Rs. 2,000 p.a.

In many states in India , the Agreement for Sale between the builder and purchasers required by law to be registered. You are advised, in your own interest to lodge the Agreement for registration within four months of the date of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the Indian Registration Act, 1908.

Are there any restrictions on transfer of immovable properties? In terms of Chapter XX C of the Income Tax Act, 1961, the Central Government has the first option to purchase certain immovable properties exceeding certain value and as such transactions covered by this can be proceeded with only after complying with the requirements prescribed therein.

You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, during the pendency of the loan and to produce evidence thereof each year and/or whenever called upon to do so.

Note : The above said information is just to educate the loan borrower. However, the terms/rules change from time to time. Please check with bank/lender for current terms and conditions/rules.

I have taken a home loan in India . Am I eligible for tax deductions in USA for home loan taken in India ? I have a home loan in India , and I send my EMI every month to India . Am I eligible for tax deductions for home loan in USA ?

If the lien holder sends you a IRS form 1098, then you are eligible for a tax deduction.

First and foremost, I would strongly suggest that you consult a tax professional. Whether or not the lender is from India might not matter. There are plenty of non-US based corporations who offer home loans to borrowers in the United States . In the majority of these situations, the lender will issue an IRS form 1098 which shows the amount of interest paid for a given tax year.

The lender will send a copy of this form to the IRS and also declare the amount of mortgage interest as income on a tax return (this can be a 1040 or some business / corporate return depending on who the lender is). As the borrower, you are legally entitled to deduct the interest through itemization on your 1040 return. The tax deduction will on form 1098 which is given to you from the lender.

In the event that you haven't received a 1098 from your lender, you might want to ask them. They should be able to tell you if you are eligible for this common deduction. There are circumstances involving foreign corporations lending money to US borrowers where they won't issue a 1098 because it can get very complicated for the lender.