Glossary: Tax, Money and Closing Terms
Auction Dunia · Law and portal facts checked as of · 13 min read
The short answer
A bank auction runs on a fixed sequence of payments — the EMD, the 25% deposit and the balance — and each has its own rule and its own consequence if missed. Around them sit the loan terms (eligibility before the bid, the lender’s decision after the win), the State’s stamp duty and registration, and the income-tax rules, which carry new section numbers under the Income-tax Act, 2025 from 1 April 2026. This glossary says what each term means and where it comes from.
Key points
- The EMD is not a separate payment on top of the 25%: the 25% deposit includes the EMD you already paid (Rule 9(3)). Both are always your own money.
- Eligibility and sanction are different steps. Eligibility is an indicative assessment of you before the bid; sanction is the lender’s decision on a specific property, made only after the win.
- Guidance value (Karnataka), market value (Telangana) and stamp-duty value (income tax) are the same government figure seen from different laws, and none of them is the bank’s reserve price.
- Form 141 replaced Form 26QB, and s.393(1) replaced s.194-IA, for deductions from 1 April 2026. Sale notices often still use the old names.
- TDS is not an extra cost: the 1% comes out of the price and goes to the government instead of the bank.
- The bank’s filing of the sale certificate is not registration. Stamp duty arises if you present the certificate for registration, and it is charged on the purchase money.
Deposits, clocks and forfeiture
| Term | What it means | Where it comes from |
|---|---|---|
| Reserve price | The minimum price at which the bank may confirm the sale. It is set from the valuation and stated in the sale notice; it is not a market value. | Security Interest (Enforcement) Rules, 2002, Rules 8(5) and 9(2) |
| EMD (earnest money deposit) | The deposit a bidder pays before the auction to take part. The Rules fix no percentage; the sale notice sets it, commonly about 10% of the reserve. Unsuccessful bidders’ EMDs are returned as the notice provides, usually without interest. | Sale-notice terms; Rule 9(3) |
| Bid increment | The minimum step by which each bid must beat the last, set in the sale notice. | Sale-notice terms |
| Confirmation of sale | The bank’s acceptance of the highest bid. No sale may be confirmed below the reserve price, and the balance period runs from confirmation. | Rule 9(2) |
| The 25% deposit | The buyer’s deposit of 25% of the sale price, including the EMD, due the same day or not later than the next working day after the win. It is always your own money; no loan funds it. | Rule 9(3) |
| Balance (the 75%) | The rest of the price, due on or before the fifteenth day of confirmation of sale. Some sale notices count from the auction date instead; plan to the stricter of the two. | Rule 9(4); sale-notice terms |
| Extension | A longer period for the balance, up to three months, agreed in writing between the buyer and the bank. It is at the bank’s discretion, never a right, and the Supreme Court has set aside sales where the balance came late without a written extension (Supreme Court, 2026 INSC 633). | Rule 9(4) |
| Forfeiture | Loss of the deposit if the balance is not paid in time; the property is then re-sold. The Supreme Court has upheld forfeiture of the entire deposit, not only the bank’s loss (Supreme Court, 2024 INSC 80). | Rule 9(5) |
| Sale certificate | The certificate the Authorised Officer issues to the buyer once the full price is paid. A SARFAESI sale completes only on full payment and the certificate (Indian Overseas Bank v. RCM Infrastructure, Supreme Court, 2022). | Rule 9(6); Appendix V |
Loan terms: before the bid and after the win
| Term | What it means | Where it comes from |
|---|---|---|
| Own funds | The money that is yours, not borrowed. It must cover the 25% deposit (including the EMD), the stamp duty and registration, any inherited dues and fees, and any part of the balance the loan does not. | Rule 9(3); RBI housing-finance rules |
| Eligibility | An assessment, before the bid, of what you can borrow on your income, obligations and credit report. It is indicative, not a loan, and portable to any lender. At Auction Dunia it is run by Kenstone Credit, the Kenstone group’s credit desk, disclosed as such. | Common usage; lender credit policy |
| FOIR | The fixed obligations to income ratio: existing EMIs plus the proposed EMI, divided by net monthly income. Each lender sets its own ceiling; no RBI rule fixes one for home loans. | Common usage; lender credit policy |
| Credit report | Your repayment history as recorded by a credit bureau, obtained by a lender with your consent. Lenders decide for themselves what history they accept; no regulation fixes a score. | Credit Information Companies (Regulation) Act, 2005 |
| LTV (loan-to-value) | The loan as a share of the property’s value. RBI caps it at 90% for loans up to ₹30 lakh, 80% above ₹30 lakh up to ₹75 lakh, and 75% above ₹75 lakh; lenders apply it to the lower of the price and their own valuation. | RBI Master Circular, Housing Finance (2022), para 3 |
| Legal scrutiny and technical valuation | The lender’s review of the title by its advocate and valuation of the property by its valuer. Both need a specific property, so they run after the win, on the bank’s sale confirmation. | Lender credit policy |
| Sanction | The lender’s decision on the loan amount and terms for a specific property. It comes only after the win, once the lender has reviewed the title and valued the property you bought. | Lender credit policy |
| Disbursement | Payment of the loan, typically by the lender directly into the selling bank’s account, inside the balance period or a written extension. | Common usage; Rule 9(4) |
| Pre-approval | A term this site does not use. No lender can approve a loan on an auction property before the win, because its review needs a property the buyer has won; what exists before the bid is eligibility. | Common usage |
| Key Facts Statement (KFS) | The standard summary a regulated lender gives before a retail loan agreement, listing the charges. A charge not shown in it cannot be levied without the borrower’s explicit consent. | RBI circular RBI/2024-25/18, 15 Apr 2024 |
Stamp duty, values and registration
| Term | What it means | Where it comes from |
|---|---|---|
| Stamp duty | The State’s tax on a document such as a conveyance. As of 19 October 2026, Karnataka charges 5% on a conveyance and Telangana 5.5% on a sale deed, on the higher of the price and the government value. It is not part of a bank home loan. | Karnataka Stamp Act, 1957; Telangana IGRS ready reckoner; RBI housing-finance rules |
| Additional duty and surcharge (Karnataka) | Additional duty is 10% of the stamp duty; a surcharge on the duty varies by area, 2% of the duty in city corporation areas. Together they add about 0.6% of value at the 5% rate. | Karnataka Stamp Act, 1957 s.3B; Department of Stamps and Registration |
| Transfer duty (Telangana) | A further 1.5% on a sale deed outside gram panchayat areas, as of 19 October 2026; nil in gram panchayat areas and on a certificate of sale. | Telangana IGRS ready reckoner |
| Registration fee | The fee to register a document. As of 19 October 2026: 2% in Karnataka since 31 August 2025; 0.5% in Telangana outside gram panchayat areas and 2% inside them. | Registration Act, 1908 s.78; Karnataka Notification RD/46/MNMU/2025; Telangana ready reckoner |
| Guidance value (Karnataka) | The State’s notified minimum value for property in an area, revised from time to time. Duty is charged on the higher of this and the price; check the current figure on Kaveri 2.0. | Karnataka Stamp Act, 1957 s.2(1)(mm); Kaveri 2.0 |
| Market value (Telangana) | Telangana’s equivalent of guidance value, published by the Registration and Stamps Department and revised across the State from 5 June 2026, as reported. | Official portal: registration.telangana.gov.in |
| Stamp-duty value | In income tax, the value adopted or assessable by a State authority for stamp duty — in practice the guidance value or market value. It decides the TDS base and the below-value tax test. | Income-tax Act, 2025 s.2(105) |
| Section 89(4) filing | The Authorised Officer sends a copy of the sale certificate to the sub-registrar, who files it in Book 1. The Supreme Court has held this filing sufficient; it attracts no stamp duty and is not registration. | Registration Act, 1908 s.89(4); Esjaypee Impex v. Canara Bank, Supreme Court, 2021 |
| Duty on a certificate of sale | Registration of a sale certificate is not compulsory, but if you present it for registration, duty is charged on the purchase money: in Karnataka as a conveyance; in Telangana 5% stamp duty and 0.5% registration fee, as of 19 October 2026. | Registration Act s.17(2)(xii); Karnataka Stamp Act Schedule Art. 15; Telangana ready reckoner |
TDS and income tax on the purchase
| Term | What it means | Where it comes from |
|---|---|---|
| Income-tax Act, 2025 | The Act that replaced the Income-tax Act, 1961 from 1 April 2026. The rules were largely carried across under new section numbers. | Income-tax Act, 2025 s.1(3) |
| TDS on property (s.393(1), formerly s.194-IA) | Where the price or the stamp-duty value is ₹50 lakh or more, the buyer deducts 1% of the higher of the two and pays it to the government. It comes out of the price, not on top of it. With several buyers or owners, the threshold is tested on the total. | Income-tax Act, 2025 s.393(1), Table Sl. No. 3(i), Notes 1 and 3 |
| Form 141 (formerly Form 26QB) | The challan-cum-statement the buyer files from their own PAN login to deposit the TDS, with no TAN, within 30 days from the end of the month of deduction. Schedule B covers a resident seller. | Income Tax Department, Form 141 help page |
| TDS certificate (formerly Form 16B) | The certificate the buyer downloads from TRACES and gives the seller once the statement is processed. | Income-tax Act, 2025 s.395(4); TRACES |
| Seller on the form | In a SARFAESI sale the bank sells as secured creditor, so the owner whose property is sold is shown as the seller, against their PAN. Without a valid PAN, deduction is at the higher of the normal rate and 20%. | SARFAESI Act s.13(6); Income-tax Act, 2025 s.397(2) |
| TDS where the owner is a non-resident (s.393(2), formerly s.195) | The 1% entry does not apply. Tax is deducted at the rates in force on the chargeable part of the payment, usually well above 1%, and a resident individual or HUF buyer reports it in Form 141, Schedule E. | Income-tax Act, 2025 s.393(2), Table Sl. No. 17 |
| Buying below stamp-duty value (s.92(2)(m), formerly s.56(2)(x)) | If the stamp-duty value exceeds the price by more than the higher of ₹50,000 and 10% of the price, the gap can be taxed as the buyer’s income. Tribunal views on auction purchases differ; take tax advice before you bid. | Income-tax Act, 2025 s.92(2)(m) |
| GST | The sale of land or a completed building is neither a supply of goods nor of services, so a completed property attracts no GST. Platform, legal and valuation fees do. | CGST Act, 2017, Schedule III, para 5 |
Capital gains on a later resale
| Term | What it means | Where it comes from |
|---|---|---|
| Short-term and long-term | Property held for more than 24 months before you sell it is a long-term capital asset; held for 24 months or less, the gain is short-term and taxed at your slab rate. | Income-tax Act, 2025 s.2(101) (formerly s.2(42A)) |
| Holding period (auction purchase) | When the clock starts for an auction purchase is not settled: confirmation of sale, the sale certificate and any registration are all candidate dates. Keep each dated document. | Supreme Court, 2007, (2007) 5 SCC 745; Indian Overseas Bank v. RCM Infrastructure, Supreme Court, 2022 |
| Long-term rate (s.197, formerly s.112) | 12.5% without indexation. A resident individual or HUF selling land or a building acquired before 23 July 2024 pays the lower of that and 20% with indexation. Rates as of 19 October 2026. | Income-tax Act, 2025 s.197(1), (3) |
| Indexation | Raising the purchase cost by the Cost Inflation Index the government notifies each year. It applies only under the 20% alternative. | Income-tax Act, 2025 s.72(8) |
| Cost of acquisition | What you paid for the property, generally the price plus the stamp duty and registration on it. Whether arrears you paid to clear the property can be added is a question for your tax adviser. | Income-tax Act, 2025 s.72 (formerly s.48) |
| s.82 (formerly s.54) | Exemption for a long-term gain on a residential house reinvested in one house in India within the time limits, with cost above ₹10 crore ignored. | Income-tax Act, 2025 s.82 |
| s.86 (formerly s.54F) | The similar exemption where the asset sold is not a house, such as a plot, worked on the net sale price. | Income-tax Act, 2025 s.86 |
| s.85 (formerly s.54EC) | Exemption for up to ₹50 lakh of a long-term gain on land or a building invested in specified bonds within six months and held for five years. | Income-tax Act, 2025 s.85 |
| Capital gains account scheme | A deposit in a specified bank for any gain not yet reinvested by the return due date, so the exemption is kept open. | Income-tax Act, 2025 s.82(2) |
Costs and dues around the closing
| Term | What it means | Where it comes from |
|---|---|---|
| All-in cost | The price plus everything needed to make the property usable in your name: duty, registration, inherited dues, transfer fees and adviser fees. Only the price can be partly borrowed. | Common usage |
| Known encumbrances | Charges or dues the bank knows of and must state in the sale terms. Dues it did not know of can still fall on the buyer. | Security Interest (Enforcement) Rules, Rules 8(7) and 9(9)–(10) |
| Inherited dues | Property tax, electricity, water and association arrears that sale notices usually place on the buyer. Electricity arrears can be recovered from an auction purchaser where the supply conditions provide (Supreme Court, 2023, CA 2109–2110/2004). | Sale-notice terms; Supreme Court, 2023 |
| Cost to cure | The estimated money and time needed to fix a defect found in diligence, such as clearing arrears or regularising a layout. | Common usage |
| Mutation fee (Greater Hyderabad) | 0.1% of the registered document value, collected by the sub-registrar at registration, as of 19 October 2026. Whether it applies unchanged in the Cyberabad and Malkajgiri corporations is to be confirmed with the corporation. | G.O.Ms.No.155 and G.O.Ms.No.192, MA&UD, 2016 |
What the auction route cannot promise
- An eligibility figure is indicative; the lender’s sanction comes only after the win and may be lower, or refused, on its valuation or title review.
- Rates, fees and section numbers change with notifications and Finance Acts; every figure here is as of 19 October 2026 and should be checked on the official page before you pay.
- Some tax questions for auction buyers, such as the holding-period start and the below-value test, are not settled; a tax adviser’s view is not a ruling.
Questions buyers ask
Sources
Statutes, rules and judgments first. Checked as of 19 October 2026; the law and portal practice change, so confirm against the source before relying on a detail.
- RulesSecurity Interest (Enforcement) Rules, 2002 — Rules 8 and 9
- StatuteThe Income-tax Act, 2025 (Act 30 of 2025), Gazette of India, 21 Aug 2025
- StatuteKarnataka Stamp Act, 1957 — s.2(1)(mm), s.3B, Schedule Article 15
- JudgmentSupreme Court, 2 Feb 2024 (2024 INSC 80) — forfeiture under Rule 9(5)
- RegulatorRBI — Master Circular, Housing Finance, 18 Feb 2022 (LTV tiers; costs excluded)
- Official portalDepartment of Stamps and Registration, Karnataka — Stamp duty and registration fees
- RegulatorGovernment of Karnataka — Notification No. RD/46/MNMU/2025 (registration fee 2% from 31 Aug 2025)
- Official portalRegistration and Stamps Department, Telangana — Ready reckoner
- Official portalIncome Tax Department — Form 141, challan-cum-statement under s.393(1) and 393(2)
- RegulatorGovernment of Telangana — G.O.Ms.No.192 (MA&UD), errata on GHMC mutation fee
This guide explains the law and the process in general terms. It is not advice on any specific property; that belongs in a due diligence report on the property itself.
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