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How to save capital gains tax on property sale in Real Estate ? And What is capital gain tax?

Property sales are usually high-ticket deals and attract huge tax on the profit generated. The Indian government provides multiple benefits to help sellers lower the Long Term Capital Gains (LTCG) tax. However, in Budget 2023-24, the Centre capped the residential reinvestment limit to Rs 10 crore. Let’s look at how can you save capital gain tax on a sale of a residential property post this change.

Every property transaction attracts taxation, and capital gains tax is one such kind levied on property sellers in India. The government levies this charge on the number of years the owner possesses the property before putting it out for sale in the market. The tax is applicable on the revenue generated by the seller on the property transaction. Although there was previously no upper limit on the maximum deduction that could be claimed while reinvesting the capital gain into a residential property, the Union Budget 2023-24 has introduced a capping of Rs 10 crore from April 1, 2023. To help you understand it better and equip you with ways to save capital gains tax on a sale of a residential property, here is a breakdown for you.

What is capital gain tax?

The first step is to understand what capital gains mean. As the name suggests, these are capital assets like properties or securities. These gains are further divided into short-term or long-term based on the holding period of the asset.

What is short-term capital gain tax?

If you sell the property within two years, the profit earned from its sale will be considered short-term capital gains. Such gains are added to your taxable income and are taxed according to the applicable income slab. There are no exemptions available to save Short Term Capital Gain (STCG) tax.

What is long-term capital gain tax?

If immovable assets such as land, house property, and building are held for two years or more and then sold with a profit, then the profit earned from its sale would be considered a long-term capital gain. You will have to pay 20 percent tax on it, which is known as Long-Term Capital Gains (LTCG) Tax.

Impact of the Union Budget 2023-24 on LTCG tax

Before we break down the Union Budget 2023-24 announcements concerning the LTCG tax, it is imperative to understand how the tax deduction worked till the Financial Year 2022-23, which ended on March 31, 2023. In this tenure, when a residential property was sold, the seller had the option to reinvest the amount to buy another house to avail LTCG benefits. The entire amount earned by selling off a house was allowed for reinvestment to buy another housing unit. There was no upper limit on this reinvestment amount, and it was tax-free.

However, in the Budget for the current Financial Year (FY) 2023-24, Finance Minister Nirmala Sitharaman added a limit to the same arrangement. Starting April 1, 2023, when a homeowner sells off a house and reinvests that amount into another residential property, the tax benefit is limited to Rs 10 crore. This means that if the reinvestment amount is up to Rs 10 crore, it will not be taxed. For any amount above Rs 10 crore, a 20 percent tax will be applied under Sections 54 and 54F of the Income Tax Act. The Rs 10 crore capping is applicable to the Capital Gains Account Scheme also.

How to compute short-term capital gains?

Step 1: Calculate the full value of consideration (FVC), which refers to the sale value of the property or value adopted by the stamp duty authority whichever is higher

Step 2: From this full value, deduct the cost of acquisition along with the cost of transfer and cost of improvement

Step 3: The final amount will be short-term capital gain.
Short-term capital gain= FVC – (cost of acquisition + cost of transfer + cost of improvement)

How to compute long-term capital gains?

Step 1: Compute the full value of consideration accruing or received

Step 2: Deduct the indexed cost of acquisition, indexed cost of transfer, and indexed cost of improvement from full value consideration

Step 3: Deduct exemptions provided under Sections 54, 54EC, 54F, and 54B

Long-term Capital Gains = FVC accruing or received – (indexed cost of acquisition + cost of transfer + indexed cost of improvement + deductible expenses from full value for consideration)

Note: Indexed cost of acquisition= cost of acquisition X cost of inflation index of the acquisition year/cost of inflation index of the transfer year

Indexed cost of transfer= the brokerage paid for arranging legal expenses incurred, deals and cost of advertising, among others

Indexed cost of improvement= cost of improvement X cost of inflation index of the improvement year/cost of inflation index of the transfer year

Cost Inflation Index is declared every year by the government. This value is used for calculating capital gains on long-term assets.

How to save capital gains tax on sale of residential property?

As real estate transactions are generally expensive in nature, the tax calculated on a property sale can be a huge amount. In order to reduce or eliminate the payable LTCG tax, follow the below steps-

• A known way to save tax on the money earned by selling a home is to re-invest it into buying or constructing another residential unit
• A simple way to do this is to select a property beforehand so there is not much delay in utilising the funds
• Another way to save capital gain tax on property sale is to invest in the Capital Gains Account Scheme, 1988
• Those interested can open a capital gains account in authorised Indian banks
• Sellers can also direct their funds towards capital gains bonds issued by the Central government
• This provision can be availed at a select few public sector financial institutions

Purchase or construct a residential property

Under Section 54 of the Income Tax Act, 1961, an individual selling a residential property can now make use of tax exemption of up to Rs 10 crore on long-term capital gains if such gains are used to purchase or construct a residential property. Remember, this exemption is only applicable to long-term capital assets (in our case, immovable properties with a holding period of more than two years).

The following conditions need to be followed to obtain this exemption:

• The seller must purchase a residential property either one year prior to the sale of the original property or two years after the sale of the original property
• If you are constructing a house using capital gains, then the construction of the same should be concluded within three years from the date of sale of the original property
• The new residential property has to be located in India
• The exemption will be taken back if the newly purchased or constructed property is sold within three years of its purchase/construction

According to the Finance Act, 2019, with effect from Financial Year 2019-20 (FY 2019-20) – corresponding to Assessment Year 2020-21 – the capital gain exemption under Section 54 has been made available for the purchase of up to two residential properties in India. It still holds true, and the Rs 10 crore deduction is applicable even if the seller reinvests in more than one housing unit. The bottom line remains that the total reinvestment amount must remain within Rs 10 crore, and any amount exceeding the capping shall be taxed at 20 percent.

Deposit the funds in a capital gains account

Identifying a suitable property to re-invest your capital gains into, arranging all of the required funds and getting the documentation in place can take some time. Accordingly, if you have not been able to re-invest your capital gains into a new property until the date of filing your income tax returns, then you may invest these gains in a ‘capital gains account’ in any of the branches of authorised banks (excluding rural branches of such banks) such as Bank of Baroda, as according to the Capital Gains Account Scheme, 1988. This deposit can be availed as an exemption from capital gains for up to Rs 10 crore. In case the capital gain amount is more than Rs 10 crore, it will be taxed at 20 percent.

In case the deposited amount is not utilised within the specified period of two years (in case of purchase of new residential property) or three years (in case of construction of a new residential property), then, the deposit will be treated as short-term capital gains in the year within which the specified period lapses.

Invest the funds into capital gain bonds

If you do not want to re-invest your capital gains earned from the sale of your property into a new residential property and do not want to construct another one, you can invest your profits in ‘Capital Gain Bonds’ under Section 54EC of the Income Tax Act. These are also known as ‘54EC bonds’ and are one of the most popular ways to save LTCG Tax.

A few conditions:

• The minimum investment into 54EC bonds is one bond amounting to Rs 10,000, and the maximum investment is 500 such bonds totalling Rs 50 lakh
• Eligible bonds under Section 54EC are issued only by Power Finance Corporation Limited (PFC), National Highways Authority of India (NHAI), Rural Electrification Corporation Limited (REC), and Indian Railways Finance Corporation Limited (IRFC)
• These bonds come with a lock-in period of five years (effective since April 2018) and are not transferable to another person
• 54EC bonds offer a five percent annual interest rate. However, this interest is taxable
• The investment into these bonds must be made within six months of selling the property. In addition, the investment has to be made before the tax filing deadline.

The associated risk factor is minimal since these bonds are backed by the Government of India. Also, they allow you to save tax whilst earning interest income.

As you can see, the Income Tax Department has provided excellent options for you to save long-term capital gains tax. It would be prudent to spend some time thinking about your personal finance goals before making such a decision. You can also speak to financial experts about such investments to take into account the implications of the FY 2023-24 Budget announcements.

Frequently Asked Questions :- capital gains tax

How do I avoid capital gains tax on property sale?

If the sale occurs after 24 months of the purchase of the property, one can avoid paying the STCG tax. If you are holding the property for more than five years, you need to invest the gains to buy a new property.

What is the rate at which LTCG tax is imposed on real estate sales?

In India, the seller is required to pay LTCG tax on the sale’s profit at a rate of 20 percent.

What happens if the capital gains tax is not paid?

The Income Tax office can charge hefty penalties in case of negligence and may take further discretionary action depending on the magnitude of the situation.

What is a sale deed in Real Estate ?

A vital document that helps to register a home successfully is the sale deed. Also known as a conveyance deed, it is a legal document used in property transactions as evidence for the sale and transfer of property ownership in favour of the buyer from the seller. The sale deed is signed after the buyer and seller have agreed to the terms and conditions. To know more about this document, read on.

A sale deed, also known as the final deed or conveyance deed, is an instrument in writing which legally transfers the ownership rights of an immovable property from one person to another in exchange of a price paid/consideration. It is made for the sale or purchase of land or any construction made on it. The person who transfers the property is known as the transferor or the seller while the person in whose name the property is transferred is called the transferee or the buyer.

The document lays down the details of the parties, the final deal price of the property, the accepted mode of payment and the time for handing over the possession of the property along with the original documents. It also acts as proof that the buyer is the outright owner of the said property.

How is a sale deed different from a sale agreement?

A sale agreement of immovable property is different from the sale deed for the same property. In simple words, the sale agreement of a property is a contract stating that a sale of such property shall happen on the terms as agreed upon by the parties. It specifies the terms and conditions, under which the property (to be sold) will be transferred.

So, a sale agreement basically, contains a promise to transfer a property in future, after compliance with specific terms and conditions. It does not develop or establish any rights or interest in the property for the prospective buyer.

Things to keep in mind before executing a sale deed

Before the execution of the sale deed, the buyer should ascertain that the title of the property is free of all encumbrances. Verification of the encumbrance status from the registrar’s office is a must for the buyer purchasing the property. After ensuring that the property is free from encumbrances, the purchaser should also corroborate that all the statutory payments such as water/electricity bill, cess, property tax and maintenance charges have been cleared and no further dues or permission is pending for the transfer of property through a sale deed.

Buyers of a property must take note that the sale deed is one of the most important documents which establishes the proof of ownership post the purchase is made. Hence, one must make it a point to acquire this document.

What is the format of an agreement to sell?

The sale agreement format contains important details of the property and the parties involved. This includes the description of the property, cost of the property, payment method and date, contact details of the seller and the buyer, tax compliance, maintenance clause (for apartment buildings) and indemnity clause, among others.

Is the agreement to sell legally binding?

An agreement to sell is required to avail finance from the bank. It also binds the parties to perform their parts of the agreement as agreed upon. It pens down the intent of the parties on paper and makes them legally indulged.

What is the difference between an agreement to sell and a sale deed in Real Estate ?

An agreement to sell is a promise in future that the property will be transferred to the rightful owner, while the sale deed is the actual transfer of property ownership to the buyer.

What is an agreement to sell in Real Estate ?

A agreement to sell is a crucial precursor to the sale deed. It has legal sanctity and states the seller’s intention to sell the property and the buyer’s intention to purchase it in the future. The transaction concludes basis the pre-established terms and conditions between the parties. For more nuances of such contracts, read further.

The sale process for a property begins with a buyer researching and shortlisting a housing unit and the seller agreeing to sell. Upon deciding to enter into a property transaction, the buyer and the seller establish the terms and conditions of the transaction. Once these discussions conclude, the need for paperwork arises. One of the initial documents in this process is the ‘agreement to sell’ or the ‘sale agreement’. The main difference between a sale agreement and a sale is that the first is an executory contract, and the second is an executed contract.

Understanding the meaning of an agreement to sell

It is an agreement in which a seller agrees to transfer the property, subject to certain conditions and covenants, in the coming times. It is not an actual sale but a written intention to carry out the deal later. The contract specifies the terms under which the title of the property concerned will be transferred. The Transfer of Property Act, 1882 (TPA) is the Central legislation regulating the sale, lease, mortgage, and gift matters. Section 54 has defined an agreement to sell as ‘A contract for the sale of immovable property stating that the sale of the concerned property will take place as per the terms mutually agreed upon by both parties.’ However, it clarifies that an agreement to sell does not establish any interest or charge on the property concerned.

If the seller, who is a signatory to an agreement to sell, fails to proceed with the process, the buyer can ask for specific performance as per the provisions of the Specific Relief Act, 1963. Conversely, the seller can also seek the performance of the contract from the buyer. However, for the agreement to sell to have legal value, it must be registered in the respective office of the sub-registrar of assurances. To do this, the buyer needs to pay the applicable stamp duty. A lawyer who deals in such matters can help both parties in this endeavour. Usually, the contract mentions the provision of 2-3 months for the buyer to arrange funds for purchasing the property.

What information does an agreement to sell contain?

Since the registered document will have legal sanctity, certain clauses mutually agreed upon, are mentioned in the contract. These clauses are usually about the penalty for dishonouring the agreement and the right to call off the deal. The agreement also states the names and contact details of the parties, the size of the property (carpet area, super built-up area, etc.), and its address. The property type, freehold or leasehold, is also mentioned. The terms and conditions in the case of mortgaged or leasehold properties will be noted.

There is also a clause stating that the seller promises to give the property to the buyer free from encumbrances. In addition, the amount of token money, which is usually 10-20 percent of the total deal value, is paid when signing the agreement to sell, and the same is mentioned in the contract.

Lastly, unless otherwise specified in the contract, an agreement to sell must be executed at the specified future date. Sale agreements cannot cover sales that have already taken place. And thus, the deadlines are based on a specific future date and conditions.

What is a Completion Certificate (CC)?

The full form of CC in real estate is Completion Certificate. A Completion Certificate (CC) is an important legal document that certifies that a building is constructed according to the laid norms and master plan of the city. This document has all the information related to the project, such as the building materials used, building height, and building plan, among other details like the provision for green belt.

This document certifies that the building adheres to all the prevailing building bye-laws, and has not violated any norms. Homebuyers must note that the CC is mandatorily shown to the authorities to obtain electricity and water connections.

Builders are allowed to apply for a provisional Completion Certificate when there are minor works left in the project. Authorities then provide a provisional certificate valid for six months. After the expiry of six months, the developer is bound to get a final CC.

Who issues a Completion Certificate?

Local authorities issue the CC after a thorough inspection of the premises. If the developer abides by the rules, the concerned authority issues the certificate. It is issued by the local body after due scrutiny in three to four weeks.

What documents are required to obtain a CC?

Listed below are the documents required to receive the CC-

• Filled out application form
• Completion acknowledgement from a registered architect or civil engineer
• A copy of building plan approval
• Structural safety certificate from concerned departments
• Copy of NOCs for sewage, water supply, electricity connection, elevators, and fire evacuation, obtained from concerned departments
• Necessary declarations

How to obtain a Completion Certificate?

The Completion Certificate (CC) of a project can be obtained in the below-mentioned steps-

• The developer must apply the local municipal authority or the local development body for getting the Completion Certificate
• The application must be submitted with supporting documents
• Officers from the concerned certifying body will visit the project site and focus primarily on the construction quality of the property
• Violations of the prescribed construction and building norms may lead to project demolition
• Upon successful inspection, a signed and stamped Completion Certificate will be issued by the local authority

Why is a Completion Certificate important?

Buyers must be aware that buying or moving into a property that does not have a CC is not recommended as it is a risky investment choice. The civic authorities hold the power to slap heavy penalties on the developer, leading to stalling or cancellation of the registered layout of the project. In case the building is already occupied, residents may also have to face eviction in extreme cases.

Difference between an Occupancy Certificate and a Completion Certificate

While the CC examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances, the OC certifies that a property is fit for possession by the buyers.

Iterating on the difference between the two documents, Deepak Kapoor, Director, Gulshan Homz, says, “Completion Certificate is just a reaffirmation that the building has been constructed as per the building bye-laws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants. As these documents are generally not required at the time of property registration, buyers may fail to realise their importance and overlook them. But for their own benefit and peace of mind, it is warranted that buyers of ready-to-move-in and under-construction properties check these documents before taking possession. This can help avoid unnecessary legal dispute or confrontation in the future.”

What is an Occupancy Certificate (OC)?

The full form of OC in real estate means Occupancy Certificate. After you have zeroed in on a property, the Occupancy Certificate is one of the most essential documents to obtain. It is a document issued by the concerned civic body to verify that-

• The property is built according to the approved plan and bye-laws
• It adheres to the building code
• It comprises all basic amenities
• All required clearances, including the fire No Objection Certificate (NOC), are in place

Who issues the Occupancy Certificate?

The competent authority issues the occupation certificate after due scrutiny, and permits the occupation of any building, under civic laws. These are generally handed over by local civic bodies like municipal corporations. The local body generally issues the certificate within 30 days of project completion.

Whose responsibility is it to obtain the OC?

It is the responsibility of the builder to get the OC from the issuing authorities and make it available to the property buyers to prevent any discrepancies in the future. However, in case the owner has taken possession of the property, he/she can also apply for the document at the concerned authority’s office.

What documents are needed to obtain an OC?

Below are the documents which the developer submits at the local civic office to obtain the OC-

• A copy of the approved building plan
• NOC received from the pollution board and the Airport Authority of India (AAI)
• Construction commencement certificate
• Latest property tax payment receipts

How to obtain an Occupancy Certificate?

It is the responsibility of a builder to obtain Occupancy Certificate. The process to obtain the Occupancy Certificate (OC) of a property involves the following steps-

• Submit an application requesting the Occupancy Certificate from the area’s housing board or apply through a prescribed form
• Submit the supporting documents along with the necessary fees
• An officer will be assigned to the project to make necessary inspection visits at the project site
• Based on the property’s adherence to the prevailing building norms, the nodal officer will issue a No Objection Certificate (NOC)
• The builder must submit the NOC at the authority’s office to obtain the Occupancy Certificate

Why is an Occupation Certificate important?

An Occupancy Certificate (OC) is necessary to apply for civic facilities like water, electricity, and sanitation, among others. The local municipal body needs this document, in the absence of which homebuyers can complain to the consumer forum or the State Real Estate Regulatory Authority (RERA) body.

What is a partial/temporary Occupancy Certificate (OC)?

In case of large-scale real estate projects, the local authorities provide a temporary or partial OC for the portion finished by the developer. A partial OC is generally issued for tower-wise construction in a large project, which allows homebuyers to access the basic amenities. However, access to common facilities, like swimming pool, fitness centre, and clubhouse, among others, is not allowed.

In case a homebuyer collects the temporary OC, the builder must later provide the permanent OC upon project completion.

Difference between an Occupancy Certificate and a Completion Certificate

While the CC examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances, the OC certifies that a property is fit for possession by the buyers.

Iterating on the difference between the two documents, Deepak Kapoor, Director, Gulshan Homz, says, “Completion Certificate is just a reaffirmation that the building has been constructed as per the building bye-laws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants. As these documents are generally not required at the time of property registration, buyers may fail to realise their importance and overlook them. But for their own benefit and peace of mind, it is warranted that buyers of ready-to-move-in and under-construction properties check these documents before taking possession. This can help avoid unnecessary legal dispute or confrontation in the future.”

Should you buy a property if the developer does not have an OC?

Before you buy a property, it is always advisable to ask for both OC and CC. If the developer fails to provide OC or CC, the next course of action will be dictated by the buyer-seller agreement. If the developer is delaying the availability of OC/CC, you can even ask for rent for that period. Also, the buyer can reach out to the authorities and register complaints with them.

Although homebuyers are advised to proactively seek these certificates from the developers, the implementation of the Real Estate (Regulation and Development) Act, 2016, has increased transparency and accountability of the builders, and made obtaining these documents easier. Overall, it is always advisable to cross-check the necessary approvals and essential documents before investing to have a seamless property transaction.

What is OC (Occupancy Certificate) in Real Estate – and Why is it Necessary

OC Full Form is Occupancy Certificate.

Occupancy certificate is considered an important document when it comes to buying a new home as it ensures that the property is constructed as per the prescribed laws. Let’s have a look why it is necessary to obtain the occupancy certificate these days.

A legal document issued by the government agency or the local development authority affirming that a constructed property is in compliance with the national building code and is fit for occupancy is called an Occupancy Certificate (OC). Whether a purchaser plans to use the property for the end or wants to sell the space, OC for a property transaction is required.

The factors verified for providing the Occupancy certificate are: 

• If the property is constructed according to law and the approved plan
• Has the building been constructed in compliance with the building code
• If it has all the basic needs required such as drainage, electricity, etc.
• If all the required clearances including the NOC from the fire department is obtained

How to get an Occupancy Certificate?

It is the responsibility of the builder / developer to apply to OC with the local municipal development authority of the property. The certificate will only be awarded after the inspection authority is satisfied that the project is built according to the approved construction plan and mandatory standards. In certain cases, though, the contractor can take partial OC and sell ownership. For instance, in the case of construction projects with mixed uses, a building contractor is allowed to acquire partial OCs of partially completed housing buildings and to pass ownership to the owners of flats. Therefore, it is essential that the buyer receives the document to make the possession of the property legal.

Which documents are required for obtaining an Occupancy Certificate?

Ideally, within thirty days after project completion, a builder should submit an OC application to the Municipal Corporation. However, buildings with some design differences and which have flouted authorized building plans do not qualify for the OC. The list of documents required for obtaining occupancy certificate are:

• Copy of approved plan of building
• NOC document copies obtained from pollution board and airport authority
• Certificate for the commencement of construction
• Updated or recent property tax slips
• What happens if you occupy the building without an Occupancy Certificate?
• The constructed building can be declared as an illegal property
• The legal authorities hold rights to evict the residents
• Due to the illicit status, the property is liable to demolition
• Loan approval and sales of the property will be constrained
• Disconnection of supply of water and electricity without any intimation
• Penalty on the property will be imposed, which will require higher property tax payment
• Receiving Khata certificate is be an issue

What is a Partial Occupancy Certificate?

The partial OC is majorly seen in case of large development plans, where the construction is done in multiple phases. In this case the partial OC is given as the developer for tower wise construction.

The main advantage of partial OC is that it provides all the access to the basic amenities and uphold legal rights of the property by homebuyers. However, the amenities such as swimming pools, fitness center and others are not accessible under the accessed. Also, the approval of home loans and the obtaining of the Katha certificate will be a problem.

Occupancy Certificate vs Completion Certificate vs Possession Certificate

The three terms may seem overlapping and confusing but they are very different from each other. A housing project will get a ‘completion certificate’ from the authorities when it is liveable with all facilities. The project will get its ‘occupancy certificate’ when the authorities are sure that the construction followed all rules, laws and by-laws. A possession certificate, on the other hand, is the confirmation of the transfer of the property from the builder to the buyer. The builder issues a ‘possession certificate’ and it has the date when the buyer officially takes over the property.

property.

Completion certificate

Occupancy certificate

Possession certificate

States whether the building has all requirements to make it liveable

States whether the construction norms and building by-laws are followed

States the date of transfer of ownership from the developer to the buyer

Issued by authorities to the builder

Issued by authorities to the builder

Issued by the builder to the buyer

Possession of the building is offered after CC issuance

Builder can apply for utilities like electricity, water supply etc. after OC

Issued within 30 days of OC and CC issuance and buyer can move in

Occupancy Certificate: Protection for Property Owners

An occupancy certificate ensures the suitability of a property for possession. It helps you ensure that neither any untoward accident occurs nor are you offered an unsafe building to reside in. As a buyer vigilance is important so that you are not duped and you can secure your rights over your property. If your builder refuses to give you an OC, you can file a complaint in the consumer’s forum. A legal notice, asking him to hand over the OC, should reach him within a month. You can come together with other buyers and report to the RERA if the project is registered under RERA (Real Estate Regulation and development Act).

Summing Up – Occupancy Certificate: 

An occupancy certificate is an important document of property rights. It helps secure government/municipal services such as electricity, water supply etc. You must remain very vigilant and ensure to receive OC from the builder. You can complain to the consumer forum or the RERA in case your builder misses/refuses to give you one.

FAQs

Can I buy the property in case the builder does not have the Occupancy Certificate?

It is always advisable to order both OC and CC before you buy a house. If the builder will not have OC or CC, the buyer-seller arrangement would be the next course of action. In case of delay in providing the OC or CC, the buyer can request the rent for the concerned period.

Can I sell my building without an occupancy certificate?

Selling a property without OC is not possible, as without the document you are not the legal owner of the property.

What is the difference between the Occupancy Certificate and Completion Certificate ?

Occupancy Permit shall inspect and approve a property that complies with national code, municipal utilities, electricity, sanitation and other authorizations. The completion certificate, on the other hand, is a declaration certifying that the property is suitable for buyers to purchase.

Who issues the Occupancy Certificate?

The municipal corporation (local municipal body) issues an occupancy certificate. They will only do so if they are satisfied that all the rules and local regulations have been followed during construction. The builder will receive the certificate which they will pass on to you.

What if the builder does not give the Occupancy Certificate ?

In case your builder misses giving you the occupancy certificate, ask them upfront. If they still refuse, you can complain to the consumer forum or the RERA.