Under Section 3 of the Indian Stamp Duty Act, 1899, it is mandatory for the buyer to pay the stamp duty and the registration charges when buying a property. It must be paid after the sales deed is processed and the amount must be mentioned clearly in the sales deed. The sales deed and the proof of the stamp duty payment stand as proof of your property ownership.
We discuss everything you need to know about the stamp duty before buying a house:
Stamp duty rate
It varies from state to state. Every state has its own stamp duty rate. Many states even offer discounted stamp duty rates if a woman is applying as the owner or co-owner.
Registration fees
Even though stamp duty varies, registration charges are the same across the country.
The penalty in case of non- payment
Since stamp duty is onetime payment, there’s also a penalty for non-payment of the same. If one fails to make the payment, then they can be fined up to two percent of the total cost of the property that needs to pay every month along with the outstanding payment.
Stamp duty for apartments
The apartment owners have to pay the stamp duty along with the individual share of the property. For example, if a property is built on 20,000 sq ft and there are five apartments, then each owner will have to pay stamp duty for 4,000 sq ft.
Documented proof of ownership
If you have paid the stamp duty, then the same is mentioned in the sales deed which acts as the proof of your ownership of the property, in case there is any dispute over the ownership in the future.
State subject
Every state has its own stamp duty laws and has the freedom to change them as per requirement. The stamp duty amounts to one the largest revenue collection of every state.
Online payment of stamp duty
Many states have given the provision to pay the stamp duty online. Few states are also offering discounts on the online payment of stamp duty.
Home loan eligibility of LIG
Earlier, the banks did not add stamp duty and registration charges to the property’s cost which caused the home buyers to part with their own savings. In 2015, the RBI directed banks to factor the stamp duty cost and registration cost if the cost of the property is less than Rs 10 Lacs. This was aimed to motivate the low-income group to invest in property.
Stamp duty for home loan agreement
Banks charge stamp duty if you are availing the home loan. The charges can be anywhere around 0.1 to 0.2 percent. The bank asks you to keep the property documents with them until you have paid the entire loan amount.
Sales deed is the most significant proof of your ownership on the property. If not kept carefully, one can lose it. But what can one do if the sales deed is lost? In such a case, one can apply for a duplicate sales deed.
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