Things to remember when cancelling an apartment booking

Are you aware of the procedure for cancelling an apartment booking? Squarefeet Group explains your rights as a buyer to cancel a booking and claim a refund.

The down trend in the real estate market has had many investors and buyers reconsidering their decisions to buy a property. Often it happens that people eagerly book an apartment but due to certain reasons, are unable to go ahead with the purchase. According to property consultants, while majority of the cancellation instances occur due to buyers reconsidering their financial circumstances, another common reason is unnecessary project delays.

Most people are unaware about the procedure of cancelling an apartment booking. This results in problems while claiming a refund. Prashant Nath from PropertYes De Emirates tells us that there are no rules or conditions laid out by the government regarding cancellation of an apartment or refund of the booking amount. “How smooth your cancellation process goes basically depends on the rapport you have with the developer” says Prashant Nath.

Important things to remember:

• Builder-buyer agreements including sale agreement or property allotment documents usually contain cancellation clauses. Go through the documents in detail as cancellation will be subject to the terms mentioned.
• Always save any acknowledgement document you receive, especially in lieu of a payment.
• It is best to pay through cheques or other recordable mode rather than cash.
• Any VAT or service Tax paid will not be refunded in case of a cancellation.
• Keep all communication in writing. Verbal assurances and promises will not hold in a court if a complaint has to be filed.

Even if no builder-buyer agreement was signed, you are still entitled to cancelling a booking and claiming refund. Experts warn that the reason for cancellation should be a genuine one or else you may get into legal trouble. In the absence of a signed contract or agreement, holding on to allotment letters and receipts of payment are very important. Application forms, acknowledgement or allotment letters may also contain terms and conditions of a cancellation which can be used to claim refund from the builder.

Cancellation charge

Prashant Nath says that it is common for builders to deduct a cancellation charge, usually 10 per cent of the cost of the apartment, before refunding the booking amount. Apart from this charge, any government tax paid by the buyer such as stamp duty, VAT or service tax will also be deducted from the refund. He adds that since there are no guidelines laid down by the government the deduction is done at the builder’s discretion and some builders might even waive it off in some cases.

Legal expert Atulay Nehra tells us that cancellation charges are usually mentioned in the builder-buyer agreement. So, if you have signed such a contract, read it carefully to find out how much money you are liable to be refunded. If terms for cancellation are missing then 100 per cent refund can be claimed from the developer. In case a developer refuses to repay the booking amount even with a clause present in the agreement, the buyer may file a case with the consumer forum asking for a refund with interest.

Seek legal counsel

It is best to seek legal counsel if you are planning to cancel an apartment booking to avoid any glitches later on. A legal expert will be able to help you out with the whole procedure and ensure that you get refunded what you deserve and nothing less. Cancelling an apartment booking involves several official formalities which a lay man might not be well-versed with. Just sending an email to the builder requesting a cancellation is not the best way to go about it. A lawyer can help you out with all written correspondence as well as with filing a complaint in case you feel your rights have been denied in any way. 

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in 

Source - 99acres.com

Taxation Rules for NRI Property Buyers

If you are NRI wish to buy Property for Parents or Investment. You Need to Know about Taxation Rules in India. Also, with the value of rupee dropping in the global market, investment in the Indian real estate market seems profitable to NRIs Investors. Many of the NRI property buyers investing in Indian shores are primarily from the Middle East, US, Singapore, Australia, UK, Canada and South Africa. As many NRIs are planning to Buy Property, this has pushed many developers to cater to this NRI category. Although buying or selling a property in India is easy, there are many NRIs who should know the tax implications while purchasing properties in India.

Many NRI wants to understand the prevailing NRI taxation rules in India, while buying and selling properties. While purchasing the flat NRIs are required to deduct income tax at 1 per cent if the value of the property is more than Rs 50 lakh. However, if you are buying the property from another non-resident then the rate of deduction would be much higher.

You need to pay the seller only the balance amount after deduction of taxes. The deducted taxes are to be paid to the Income Tax Department along with a duly filled Challan 26QB.

Further, while selling the property, taxes will have to be paid on capital gains (i.e. profit). There are certain investments that you can make to minimize the tax outgo. It is very important that you check the tax implications in the country of your residence as well.”

Those who are looking to purchase another property (probably a shop), for one of the property, income (equivalent to the rent that a similar property would fetch) will have to be offered to tax. One can choose the property for which you will declare the rent depending on what would be beneficial.

Tax savings for NRIs

NRIs who had sold his ancestral property and is now planning to invest in a plot. Considering the property sold was a residential house/flat, you need to reinvest the amount of capital gain (after indexation) in another residential house to claim the capital gain exemption.

To save on tax there will be no benefit to re-investment in the plot of land unless you construct residential house on the said plot in a period of 3 years from the date of the sale of original property.

You can also claim capital gain exemption u/s. 54EC by investing in certain notified bonds (REC/NHAI).

Can a PIO card holder sell property in India and reinvest in the UK? He need to pay tax and if yes what percentage?

Considering the property was on hold for more than 3 years now and is a long term capital asset, the owner will have to pay taxes at 20.6 per cent post indexation on the amount of capital gains. With the amendment brought up by the Finance Act 2014 you will not be eligible to claim any exemption for reinvestment in property outside India. But you can save taxes by reinvesting the amount of capital gain in 54EC Bonds.

The top five do’s you should know before making an investment:

• 1Personal visit to site along with self evaluation of the project, study about builder etc. is very essential. (Online data should be verified before final decision) 
• A local person/attorney can really help for some miscellaneous jobs. 
• Before renting the premises, proper care should be taken for getting possession back on expiry of the terms. 
•  If money is to be repatriated out of India, care should be taken of prevailing laws for the same. 
•  TDS at the rate of 20 per cent is deducted from the sale price when any property is purchased from NRI, so that is to be considered.

 

If you are NRI and Planning to Buy Property in Thane, Mumbra, Ambarnath Contact us @ 022 6654 3333