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What is RERA?

To bring transparency to the home buying process, the Government of India passed the Real Estate Regulatory Authority (RERA) Bill in May 2016. Initially, only 52 of the 92 sections in this bill were notified in the RERA Act, but the remaining 40 sections also came into effect on the 1st of May 2017.

The Real Estate (Regulation and Development) Act was introduced by the Government to protect the interests of homebuyers in India and boost real estate investments across the country. Since its inception, the RERA Act has brought about a flurry of improvements in the real estate industry, such as better fraud protection, enhanced transparency about carpet areas, timely delivery of projects, and prevention of misuse of funds through a reserve account, among others.

That is why it’s always a smart choice to pick a RERA-registered property while buying a house or commercial space. The RERA Act is applicable in all Indian states and Union Territories. If you wish to purchase a RERA-registered property in India, you can avail of a Tata Capital Home Loan in a few simple steps.

What is the Objective of RERA?

The RERA act was essentially launched by the Government of India to protect homebuyers from the malpractices of unfair builders. It was also implemented to address the concerns of various stakeholders in the real estate industry, including buyers, brokers, builders, and real estate agents. The overall objective of the RERA Act is to eliminate the prevalent problems in the sector and bring about positive changes in every aspect.

As a result, numerous RERA communities have been set up by the Government across different states of India to oversee whether the rules and guidelines specified by the RERA Act are being strictly followed or not. At present, all builders and developers in India are mandated by law to register their projects with these state bodies for approval.


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Key Benefits & Salient Features of RERA

After the implementation of the RERA Act, there have been increased transparency and uniformity across the real estate sector. RERA has brought about several positive changes in different facets of the industry. Here are some key benefits of the RERA Act:

Standardization of the Carpet Area

One of the several advantages of the Real Estate Regulatory Authority is the standardization of carpet areas across real estate projects. Unlike before, builders now use a standard formula for measuring the carpet areas of their project units. The RERA Act also prohibits promoters from advertising inflated carpet areas to escalate the selling prices.

Reduction in Advance Payment

After the implementation of the RERA Act, builders or developers cannot ask for advance payments of more than 10% of the property’s cost before the buyer has signed the sales agreement. This will help the buyers immensely to plan their finances better before availing of a home loan to purchase a property.

Timely Delivery of Projects

Under the Real Estate Regulatory Authority, if the builder fails to complete the project by the promised date, the buyer has the right to withdraw from the project, and they shall be entitled to receive a full refund from the builder. Else, the builder is required to pay specific interest to the buyer on the amount invested by them till the completion of the project.

Quick Conflict Resolution

One of the objectives of the RERA bill was to ensure quick dispute resolution and grievance redressal of buyers. Under the RERA Act, if the buyers have any grievances against the builder, they can take them up with the state authorities set by the Government. They can even file an appeal with the Appellate Tribunal, which will redress their grievances within 60 days.

Protection of Buyer’s Rights

If the buyers find any quality or structural defect in the property within five years from the date of possession, the builder is liable to rectify it within 30 days without charging anything extra. Apart from this, if there is a mismatch in the commitments made by the builder and the actual project, the buyer has the right to withdraw from the project and ask for a full refund of the amount paid by them till then.

What is the Impact of RERA on Homebuyers?

The implementation of the RERA Act has brought some radical transformations to ensure standardization, accountability, and transparency between homebuyers and developers. Below are the major upsides of this Act:

Increased Transparency

Under the RERA Act, developers are mandated to disclose all project details on their websites, such as project layout, approvals, execution plan, stage-wise completion status, etc. All details of RERA-approved projects are also displayed on RERA’s official website.

Buyers’ Security

For RERA-approved projects, developers are required to create reserve project accounts and park 70% of the funds received from buyers in those accounts. Such development provides a sense of security among the buyers, protecting them from the misuse of their funds by the builder.

Standardized Sales Agreement

RERA benefits for homebuyers also include a standardized format for preparing sales agreements between buyers and promoters. This ensures that there are no one-sided clauses that can harm the buyers’ interests.

Penalty on Violations

In case a builder or promoter fails to follow the RERA guidelines, it is required to pay a stiff penalty, which can be up to 10% of the total cost of the project. This ensures that they take the law seriously and follow RERA guidelines with due diligence.

What should you know about RERA act in the Different States?

As per the Real Estate (Regulation and Development) Act, every state and Union Territory (UT) in India needs to establish its RERA regulatory body. No builder or developer is allowed to market its project without seeking approval from their respective state’s RERA regulatory body. As per the latest information available from the Ministry of Housing and Urban Affairs, around 30 states and UTs in India have set up the RERA authority bodies under the RERA Act. Below are the RERA details of some major Indian states:

  • MahaRERA

    The Maharashtra Real Estate Regulatory Authority (MahaRERA) came into force on the 1st of May, 2017. It is a RERA regulatory body that handles RERA registrations and compliances in Maharashtra and UTs like Daman & Diu and Dadra & Nagar Haveli.

  • GujRERA

    The Gujarat Real Estate Regulatory Authority (GujRERA) also came into force on the 1st of May, 2017. It oversees and regulates the realty sector in Gujarat. As a buyer, you can check the details of the RERA-registered projects in Gujarat on the GujRERA website.


    The Tamil Nadu Real Estate Regulatory Authority (TNRERA) came into force on the 22nd of June, 2017. It oversees the implementation of the RERA guidelines and regulations in the Tamil Nadu state and the Andaman & Nicobar Islands.


    Uttar Pradesh was among the very first states to implement the rules of the RERA Act. The Uttar Pradesh Real Estate Regulatory Authority (UPRERA) was established in May 2016 under section 20 of the RERA Act. It streamlines real estate transactions and redresses the grievances of the residents of UP.

How to Register Under the RERA Act?

As per the RERA Act, all builders and developers are required to register their upcoming projects with their respective state’s RERA authority. The RERA registration process is the same across all states. Below are the steps one needs to follow to register a project under the RERA Act:


Account Opening

First, they need to open a bank account as specified under section 4 (2) (I) (D) of the Real Estate (Regulation and Development) Act.



Next, they are required to collate and submit the essential documents required for RERA registration online.


Form Submission

Next, they need to submit a duly-filled Form A for RERA registration. Agents and promoters must submit Form B, defining their roles in the industry.


Fee Payment

Now, they need to pay the required RERA registration fee at the RERA website. This fee may vary from one state to another.


RERA ID Allocation

Post successful payment of the RERA registration fee, a unique RERA ID is allotted for the project. This RERA ID can be used to view any details about the project on the RERA website.

What are the Documents Required for RERA Registration?

Following are the documents required for registering a project with the RERA authority:

  • PAN Card of the promoter and a copy of their Aadhaar Card
  • A passport-sized photograph of the promoter. If the promoter is a firm or a company, then the photographs of all founding members are required
  • Income Tax Returns (ITRs) of the promoter for the past three years 
  • Auditor Report, Balance Sheet, and Profit & Loss Statement of the promoter
  • Land Details (Legal Title Deed, Mortgage, Rights)
  • Project Details, including the layout plan and sanction plan
  • Details of the total number of apartments, their carpet areas, balconies, open terraces, etc.
  • Ownership Proofs (Sale Agreement, Proforma of Allotment Letter)
  • Authenticated Legal Title Deed or any other relevant document
  • Other RERA registration documents required by the respective state authority

How to Check if a Property is RERA-Compliant?

All builders and developers are required to register their properties under the RERA Act. Here’s how you can check if a property is RERA compliant or not:

  • All builders and developers must have the necessary consent and licenses before promoting a new project. You can check for these documents to ensure a property is RERA compliant
  • Real estate developers need to create a reserve account to save the funds deposited by the buyers of RERA-registered projects. You can check the proof of these accounts to make sure that the builder has registered its property with the applicable RERA authority
  • If the land area exceeds 500 square meters, the builder is required to take approval from the RERA authority before advertising any property built on that land.

Besides, you can visit the property’s website to check for the RERA registration ID. You can enter this ID on the official RERA website to get the details of the project.

Tax Savings under RERA Act

Your home loan EMIs comprise two components - principal and interest. To encourage you to make investments in properties, the Government of India offers certain tax benefits under various sections of the Income Tax Act of 1961. These benefits are offered against the principal and interest components of your home loan EMIs. 

Below are the tax benefits available for home loan borrowers in India:

  • Section 80C
  • Under Section 80C of the Income Tax Act, you can claim tax deductions against the principal component of your home loan EMIs. However, this deduction can be claimed only if you are repaying a home loan for a self-occupied property. The maximum tax deduction available under this section in a financial year is Rs. 1.5 lakh.

  • Section 24

Under Section 24 of the Income Tax Act, you can claim tax deductions against the interest component of your home loan EMIs. The maximum deduction allowed under this section in a financial year is Rs. 2 lakh. Again, you can claim this deduction if you are repaying a home loan for a self-occupied property. 

Another important condition to avail of the tax benefits mentioned above is that the construction of your house must be complete. It means that these benefits are available only after the construction of an under-construction property gets complete or if you have purchased a ready-to-move-in property.

In addition to these, tax benefits under section 24 can be claimed only if the construction of your house has been completed within five years. In case the construction of your house takes more than five years to complete, you can claim a maximum of Rs. 30,000 only as a tax deduction against the repayment of the interest component of your home loan.

Investing in these projects can be an excellent way to ensure tax savings under sections 80C and 24. One of the advantages of RERA-registered projects is that you can rest assured of their timely construction. But in case the construction of a RERA project takes more than five years and you lose out on the potential tax savings, the builder of the project will be liable to pay for your losses as per the Act. 

Let’s understand tax savings under these projects with the help of an example. Suppose you have taken a home loan of Rs. 80 lakh at 9% interest per annum for a tenure of 20 years. It means that the total interest that you have to pay on your home loan would be Rs. 93 lakh (approximately), and the maximum tax savings you can make under section 24 would be Rs. 40 lakh (approximately).

However, if your builder fails to complete the construction of your property within five years, you would be able to claim a maximum tax benefit of Rs. 6 lakh in 20 years. The difference of Rs. 34 lakh that you can't receive due to the delay in construction will be paid to you by your builder. 

What are the Penalties Under the RERA Act?

Strict penalties are imposed on builders/promoters and real estate agents for the violation of the RERA Act. The offenses and penalties are described in Sections 59 to 72 of Chapter VIII of this Act. 

Below are the penalties imposed on builders or promoters under the RERA Act:

Non-registration of a project Up to 10% of the estimated cost of the project
Providing false information about the project Up to 5% of the estimated cost of the project
Violation of laws Either 10% of the estimated project cost or imprisonment for up to three years
Severe non-compliance with RERA The daily penalty of up to 5% of the estimated project cost

Below are the RERA penalties imposed on real estate agents:


Promoting a non-registered project Rs. 10,000 per day for default
Non-compliance with the Appellate Tribunal Charged 10% of the estimated project cost or up to one-year imprisonment

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What our customers say about us

I had applied for a home loan at Tata Capital & got the it approved quickly. The process was smooth and sanctioned with sufficient amount with tenure period of 20 yrs.

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Home Loan | 14 March, 2022

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Home Loan | 11 March, 2022

The customer support service is good as they responded to my queries without any wait time. With their help, my home loan was approved in very less time.

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Home Loan | 28 February, 2022

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Home Loan | 18 February, 2022

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Home Loan | 20 October, 2021

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Home Loan | 20 October, 2021

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