Laws related to property registration in India

When you buy a property, the legal change in ownership takes place after property registration. Several laws come into picture in this highly complex legal procedure. This makes it of utmost importance to have a fair understanding of this legal process.

What is property registration?

When a property is transferred from one person to another, this transaction must be formalised through registration at sub-registrar’s office after payment of certain dues like stamp duty. This process is known as registry of property.

Property registration laws

The law of registration of documents is contained in the Indian Registration Act, 1908. This law provides for the registration of various documents, to ensure conservation of evidence, prevention of fraud and assurance of title.

See also: All about immovable property

Is property registration mandatory?

Among the many property-related transaction that attract mandatory registration is purchase of high-value residential units and plots. Under Section 17 of the Registration Act, 1908, all transactions that involve the sale of an immovable property for a value exceeding Rs 100, should be registered. This effectively means that all the transactions of sale of immovable property have to be registered, as no immovable property can be purchased for merely Rs 100. The same rule applies to gift of property, as well. Even though the donor does not receive any monetary consideration in exchange for the property, the gift deed has to be registered to get legal validity. Additionally, all transactions of lease for a period exceeding 12 months are also mandatorily required to be registered.

In special cases, when a party to the transaction cannot come to the sub-registrar’s office, the sub-registrar may depute any of its officers to accept the documents for registration, at the residence of such person. The term ‘immovable property’ includes land, buildings and any rights attached to these properties.

See also: Frequently asked questions on property registration in India

 

Is land registration must?

As mentioned in the section above, the transfer of property must be registered, if it exceeds a certain monetary limit. So, if the sale of land is done for more than Rs 100, the land must be registered in the name of the new owner by paying the due stamp duty and registration charges.

See also: Types of land ownership

Documents that require mandatory registration

• Instruments of gift of immovable property
• Non-testamentary instruments or transactions that involve the sale of an immovable property for a value exceeding Rs 100.
• Lease of immovable property from year to year.
• Contracts to transfer immovable property for purposes mentioned in Section 53A of the Transfer of Property Act, 1882.

See also: Rules pertaining to TDS on sale of property

Documents for which registration is optional

Section 18 of the Registration Act, 1908, holds that the following documents may or may not be registered:

• Will: While registration is not mandatory, it is ideal to register a will to provide it property legal standing. 
• Rent agreement or property leases where the tenancy period is up to 11 months: This is the reason why most rent agreements are signed for a period of 11 months.
• Documents of past transactions: One cannot re-register such documents. 
• Court order comprising an immovable property valued below Rs 100: As the value is less and the work and charges involved in the process are much higher.
• Certificate of sale granted: This document, issued to buyers of foreclosed properties, does not confer ownership and hence, does not require registration.
• Agreement of mortgage: Ideally, this document too must be registered to give it proper legal standing.
• Promissory note: It is a document that promises to pay someone and hence, does not require registration.
• Instrument of partition by revenue officer: This document has government sanction and thus, does not need registration.
• Grant of immovable property by the government: As the grantor is the absolute owner of the property. 

See also: How to become co-owner of property?

Procedure for property registration

The property documents that need to be registered, should be submitted to the office of the Sub-Registrar of Assurances within whose jurisdiction the property, which is the subject matter of transfer, is situated. The authorised signatories for the seller and the purchaser, have to be present along with two witnesses, for registration of the documents.

The signatories should carry their proof of identity. The documents that are accepted for this purpose, include Aadhaar Card, PAN Card, or any other proof of identity issued by a government authority. The signatories also have to furnish the power of authority, if they are representing someone else.  In case a company is party to the agreement, the person representing the company has to carry adequate documents, like power of attorney/letter of authority, along with a copy of the resolution of the company’s board, authorising him to carry out the registration.

You need to present the property card to the sub-registrar, along with the original documents and proof of payment of stamp duty. Before registering the documents, the sub-registrar will verify whether adequate stamp duty has been paid for the property, as per the stamp duty ready reckoner. In case there is any deficit in the stamp duty, the registrar will refuse to register the documents.

Stamp duty is the tax you pay to the government for attaining legal ownership over an asset, while the registration charge is the fee to get this legal formality completed in the government records. Stamp duty varies from state to state. In most states, women are offered waivers on stamp duty payment.

Note here that witnesses are quite important in the overall process. The two witnesses that you intend to present during the registration, will also have to establish their identity in front of the sub-registrar. For this purpose, they should also carry their ID proofs and their address proofs. Additionally, their biometric identity will also be scanned during the process.

See also: All about online property registration in India

 

Time limit and fees for property registration in 2024

Documents that have to be mandatorily registered, should be presented within four months from the date of their execution, along with the requisite fee. In case the time limit has expired, you can make an application to the sub-registrar for condonation of the delay, within the next four months and the registrar may agree to register such documents, on payment of a fine that may be up to ten times the original registration fee. The registration fee for property documents is 1% of the value of the property, subject to a maximum of Rs 30,000.

Earlier, the documents that were presented for registration, would be returned to you after a period of six months. However, with computerisation of the offices of the sub-registrar, the documents (bearing the registration number and proof that the documents have been registered by the registrar) are scanned and returned to you on the same day.

See also: How to remove illegal possession from your property?

Registration charges in key Indian cities

City	Registration charges
Bangalore	1% of property value
Delhi	1% of the total market value of sale deed, plus Rs 100 pasting charge
Mumbai	1% of the total market or agreement value of the property or Rs 30,000, whichever is lesser
Chennai	1% of the market value of the property
Kolkata	1% of the total cost of the property

Implication of failure to register property

Failure to register the purchase agreement of a property, could put you at a huge risk. Any document that is required to be registered but is not registered, cannot be admitted as evidence in any court of law.

It is pertinent to note here that unless you name is mentioned in the government records as the owner of a certain property, proving the ownership may not be possible. For this reason, property registration is a must for the buyer.

Also, as unregistered properties hold no legal validity, the owner runs the risk of losing the property, even if he is in possession of the said property.  In case the government were to acquire this property at any point, in order to develop an infrastructure project, the owner would not be able to claim the compensation that is typically offered to land/property owners in such cases.

See also: What is mutation of property and why is it important?

Amendments in Registration Act

Tamil Nadu has been one of the first states in India to bring about significant amendments in the Registration Act, in order to check fraudulent activities in the property registration process. The amendment provides the right to the inspector general of registration, to cancel any fake documents submitted during the property registration process. Earlier, the detection of fake documents required the inspector to submit the documents to court, whereby the action to cancel such documents was delayed. Now, the power lies in the hands of the inspector to cancel the documents directly. Further, the advocates preparing the property registration documents, along with the writers, are required to provide their photographs and sign the documents to curb frauds. An imprisonment of three years would also be imposed on any person submitting fake documents. The state is also planning to set up a committee to investigate large-scale property registrations.

Online property registration

In most Indian states, the buyer can complete a large part of the property registration process online. Depending on the state where you live, you could avail of the online services, to part-finish the registration process. However, for the final step, you would have to appear at the sub-registrar’s office, along with the seller and two witnesses, to complete the transaction. Once the documents are registered, you will have to revisit this office, to collect your registered property documents.

Can I register property online without going anywhere?

While most states allow one to carry out a large part of the property registration process online, for the final formalities to take place, all parties concerned have to visit the sub-registrar’s office to get the property registered. Using the online channels, the buyers can basically pay the stamp duty, provide all the details and book an appointment at the sub-registrar’s office.

Can I register a land without deeds?

Owning a piece of land without deeds is a very common problem in rural India. Although such cases are rare in urban areas, there are certain ways in which one can register their property or land without a deed. In such cases, the landowner needs to submit an application to register the property at the Land Registry Office. The owner needs to either show sufficient proof of his ownership or state the reasons why the land deeds are not present, along with stating the owner prior to him and other similar details. It is only through sufficient information and proof that registration of such properties is allowed in India.

 

Step-wise property registration process in India

The following process must be followed to complete the registration process:

1. All details about the property, seller and buyer, consideration amount, stamp duty calculated on value of property as per circle rate or the consideration amount whichever is higher; charges to be paid in the shape
of stamp duty, transfer duty and registration fee and format of the instruments can be obtained from the website of the revenue department.

2. E-stamp papers can be purchased for SHCIL.

3. After purchase of stamp paper(s), the document has to be written by by the document writer and executed in the presence of two witnesses. Necessary enclosures like copy of title deed, copy of Jamabandi, map, plan, digital photograph, etc., have to be enclosed with the document.

4. The document has to be presented before the Sub-Registrar in whose jurisdiction the property is situated. The Sub-Registrar is to scrutinise the document and amount of stamp duty, transfer duty and registration fee.

5. The executant has to appear before the sub-registrar for admission of the document. Two witnesses are required to be present before the Sub-Registrar to authenticate the identity of the executant.

6. At the final stage of the registration, the copy of the document is to be pasted in the book and the original document is returned to the claimant.

What actions can be taken by the
sub-registrar once documents are presented to them?

The Sub-Registrar has following options:

A. To register the document and return the original document duly registered to the executant.
B. He may refuse the registration of document by a speaking order stating clearly the reason of rejection.
C. He may impound the document to the collector of stamp for realisation of deficient duty and/or penalty if any.

 

Documents required for property registration

1. Agreement to sale
2. Sale deed
3. Encumbrance certificate
4. Property tax receipts
5. No-objection certificate
6. Power of Attorney, if applicable
7. Stamp duty and registration fees payment proof
8. Occupancy certificate for new buildings
9. Completion certificate for under-construction buildings
10. TDS deduction certificate (applicable on properties worth over Rs 50 lakh))
11. PAN Card of buyer
12. PAN Card of seller
13. Aadhaar card of seller
14. Aadhaar card of buyer
15. Passport size photos of buyer and seller
16. ID proof of buyer
17. ID proof of seller
18. ID proof of witnesses
19. Address proof of buyer
20. Address proof of seller
21. Address proof of witnesses

Problems with online property registration in India

Even though most states in India have digitised part of the property registration process with an aim to cut down long queues at the sub-registrar office and time taken in completing the process, the virtual medium is not without its own issues. Technical glitches, for instance, are a common occurrence due to which online application for property registration can get delayed. Uploading of documents can be another major issue when applying online for property registration. 

In the absence of clear guidance and lack of digital awareness, homebuyers often fail to save documents they are supposed to upload in the required formats. They are then forced to take help from a third party to complete the process.

Another major issue with online property registration in India is that it is only partial. One has to eventually visit the sub-registrar office physically for final verification. This defeats the purpose of bringing the process online to a great extent. 

Conclusion 

Property registration is a legal requirement that must be fulfilled not only to avoid a penalty but also to safeguard your interest as a property owner. This is why it becomes extremely important to do your research about applicable rules and regulations to steer clear of any legal, financial trouble in future. 

As you proceed to gain information about the process, official websites of the revenue department can also be of help. Many states have set up portals to facilitate online property registrations. These portals provide information on model deeds, stamp duty rates and enable parties to initiate the registration process. 

FAQs

What documents are required for registration of property

The documents that are accepted for this purpose, include Aadhaar Card, PAN Card, or any other proof of identity issued by a government authority. The signatories also have to furnish the power of authority, if they are representing someone else.

What is the property registration fee in India

The registration fee for property documents is 1% of the value of the property, subject to a maximum of Rs 30,000.

What happens when you fail to register the property

Failure to register the purchase agreement of a property, could put you at a huge risk. Any document that is mandatorily required to be registered but is not registered, cannot be admitted as evidence in any court of law.

What is time limit for registering the property

Documents that require registration, should be presented for registration within four months of its execution, along with the requisite fee.

What is the procedure for registering property

The documents that need to be registered, should be submitted to the office of the Sub-Registrar of Assurances within whose jurisdiction the property falls. The authorised signatories for the seller and the purchaser, have to be present along with two witnesses, for registration of the documents.