Everything you Need to Know About Stamp Duty Charges and Rates
Mar 24, 2020 Home Trading Steps
When you buy a property, the government levies a tax on the transaction of the property i.e, when the owner of the property changes from one person to another. The tax levied is called stamp duty and every property transaction, both residential and commercial, as well as freehold or leasehold properties, involves stamp duty charges. The rate of which differs from state to state.
How is stamp duty calculated?
Every state has its own stamp duty slab and it generally varies from 3 percent to 10 percent. It is the buyer who is responsible to pay the stamp duty charges.
Stamp duty is calculated on the higher value between the ready reckoner rate and the agreed value of the property. For example, if the value of the property is Rs 60 lacs but the agreed payment of the same if Rs 50 lacs, then the stamp duty is paid on Rs 55 lacs.
Stamp duty percentage:
How is stamp duty calculated?
Every state has its own stamp duty slab and it generally varies from 3 percent to 10 percent. It is the buyer who is responsible to pay the stamp duty charges.
Stamp duty is calculated on the higher value between the ready reckoner rate and the agreed value of the property. For example, if the value of the property is Rs 60 lacs but the agreed payment of the same if Rs 50 lacs, then the stamp duty is paid on Rs 55 lacs.
Stamp duty percentage:
- Property Status: The status of the property plays an important role in determining the stamp duty charges.
- Location: Location of the property i s very important like metropolitan city, suburbs, rural area etc.
- Age of the owner: Some states give discounts to senior citizens.
- Gender of the owner: To encourage the women to buy properties, some states have stamp duty rates fixed at 1 percent.
- Usage of the property: Residential or commercial properties have different stamp duty rates.
- Type of property: Flats and independent houses have different stamp duty rates.
How to pay stamp duty?
The government of India allows the buyer to pay the stamp duty in one of the three methods: Franking method, non- judicial paper or e- stamping method.
- Franking method: Under this, the agreement is printed on plain paper. This paper is then submitted to an authorized bank which processes the paper through the Franking machine.
- Non- judicial stamping method: The agreement between the parties are written down on a paper and it has to be officially registered within four months.
- E- stamping method: The buyer can pay the stamp duty online through RTGS/ NEFT method. The stamp duty certificate can then be downloaded for registration purposes.
Can someone evade stamp duty charges?
Some buyers undervalue the property to escape paying high stamp duty and the real estate sector suffers from this practice. Evading stamp duty charges can attract the government to penalise you for the same. The charges for the penalty differ from state to state but it can range from 8 percent to 20 percent and in some cases jail time can also be given.
How can one save on stamp duty charges?
Every state allows discounted stamp duty charges for women. So if a buyer wants t save on stamp duty then they can register and buy the property in the name of the female family member. While looking at properties, you can look for the locations that offer the lowest stamp duty to buy the property.
Developers run offers during the festive season and may grant you stamp duty discount and offer to pay it themselves.
Developers run offers during the festive season and may grant you stamp duty discount and offer to pay it themselves.
Stamp duty in various cities
Stamp duty in Mumbai and Pune ranges to 3 percent to 6 percent. Stamp duty in Chennai is fixed at 7 percent while the stamp duty in Bengaluru ranges from 2 percent to 5 percent.
The stamp duty in Ahmedabad is 4.90 percent while the same is ranges from 4 percent to 7 percent in Delhi and Kolkata.
The stamp duty in Ahmedabad is 4.90 percent while the same is ranges from 4 percent to 7 percent in Delhi and Kolkata.
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