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More than buying a property, registering it can be taxing. If you are planning on buying a property, remember that the amount quoted to you by the seller is not the final price you have to pay.
Easily, few lakhs get added to the price quoted to you when you’ll register it on your name. Did you know that you will be charged stamp duty and registration charges, cess, and surcharges when you pick a property? Yes, all the charges put together can come up to 7% to 10% of the total market value of the property or more than that. In most states in India, 5% to 7% of the total market value of the property is charged as stamp duty while 1% is charged as registration fee.
While transferring the title of your property to another person, you will be charged property stamp duty. This is a fee that is levied by the state government on the documents you need to register your property. Stamp duty and Registration Charges differ from one state to another. You will have to pay Stamp duty while registering a property as it is mandatory under Section 3 of the Indian Stamp Act, 1899.
The state government collects stamp duty to validate your registration agreement. A registration document with a stamp duty paid tag on it acts as a legal document to prove your ownership of the property in the court. Without paying stamp duty charges, one cannot claim the property to be his/her own legally. Thus, it is very important to pay the full stamp duty charge.
Given below are the stamp duty and registration charges in different cities across India
| City | Stamp Duty Charges | Registration Charges |
|---|---|---|
| Bangalore | 2% to 5% | 1% of the property value |
| Delhi | 4% to 6% | 1% of the deal value |
| Mumbai | 3% to 6% | 1% of the property value |
| Chennai | 1% to 7% | 1% to 4% of the property value |
| Kolkata | 5% to 7% | 1% of the total property value |
| Gujarat | 4.9% | 1% of the total property value |
| Kerala | 8% | 1% of the total property value |
| Maharashtra | 5% | 1% of the total property value |
| Tamil Nadu | 7% | 1% of the total property value |
| Uttar Pradesh | 7% | 1% of the total property value |
| West Bengal | 7% to 8% | 1% of the total property value |
| Rajasthan | 5% to 6% | 1% of the total property value |
| Telangana | 5% | 1% of the total property value |
| Uttarakhand | 5% | 1% of the total property value |
As mentioned earlier, there are many factors that determine the stamp duty charge you’ll land up paying. The bottom line is that the stamp duty charge is calculated:
If you want to calculate the stamp duty charge you will be asked to pay, consider using one of the many online stamp duty calculators available. In a few seconds, you will be able to get an idea of the amount you will need to get your property registered. All you have to do is:
There are 3 ways in which you can pay stamp duty. They are:
You must remember that all states will not have all 3 methods. In case all 3 ways are available, you could choose the method that suits you.
Purchase Of Physical Stamp Papers:This is the most traditional way of paying stamp duty and registration charges. Here, you purchase Non-judicial stamp paper from an authorized vendor. Non- judicial stamp paper are papers that have impressed stamps. Once you purchase the stamp paper, the transaction details can be written/typed on them. Finding a vendor selling this type of stamp paper is no easy job. Also, many a time there is a shortage of such paper. If the stamp duty that has to be paid is a high amount, then you might require many stamp papers. So, this method is not preferred by many.
E-StampingTo avoid counterfeit stamp papers and to make stamping easy, the Government introduced e-stamping. In some states, e-stamping is compulsory. E-stamping is essentially stamping done online. Stock Holding Corporation of India Limited (SHCIL), has been appointed as the official vendor for e-stamping and is also the Central Record Keeping Agency for all the e-stamps that are used in the country.
In order to do e-stamping, you have to visit the SHCIL website. Choose your state to see if e-stamping is allowed. You will get information on the transactions that you must e-stamp and the list of collection centres that will issue certificates to those who e-stamp. Fill up the application form and give it to the collection centre along with the money for the stamp duty.
There are several ways you can pay such as through Debit Cards, Credit Cards, cheques, demand drafts, and online banking. Once you pay the stamp duty, you will get the e-stamp certificate. This certificate will come with a unique certificate number (UIN) that will have the issue date.
The benefit of e-stamping is that it is convenient. Another benefit is that the authenticity of your e-stamp can be verified online using the UID number. However, the issue with e-stamping is that a duplicate of your e-Stamp will not be issued.
Franking:This is a process where an authorised franking agent will put a stamp on your document indicating that the stamp duty has been paid. Before you execute the transaction for which stamp duty has to be paid (typically this will be before signing the document), you should approach an authorised bank that will act as a franking agent, or a franking agent to deposit the stamp duty. Once you pay the stamp duty, a franking machine will be used to frank the document with a special adhesive stamp.
Every state will have a minimum amount prescribed for franking. For instance, minimum franking charges in Bengaluru are pegged at 0.1% of the agreement value. So, if you are buying a house for Rs. 50 lakhs, you need to pay 0.1% or Rs. 5,000 as charges for franking.
This fee will, however, be adjusted against the stamp duty at the time you execute the sale deed. Say, if the stamp duty for the sale deed is 5.5%, then, you need to pay only 5.4% because you already paid a franking charge of 0.1%.
Once you pay the stamp duty, the document has to be registered under the Indian Registration Act with a sub-registrar. This registrar should be of the jurisdiction where the property is situated if the transaction involves property purchase.
The basic purpose of registration is to record the execution of the document. Only when you register the document, it becomes legal and the ownership, if any, is transferred to the right owner.
Registration FeeThe registration fee is a fee that is over and above the stamp duty. This fee varies from state to state. For example, the registration fee in Karnataka is pegged at 1% of the value of the transaction.
It is not lawfully right to pay less stamp duty for your property. It is required by law, that you pay the right stamp duty when getting your property registered. Many people undervalue their property and quote a low market value to escape paying high registration fees and stamp duty charges. However, it is not advisable to do so. If caught, you will be asked to pay a huge penalty and can even be imprisoned. Also, if you are a commercial builder, your reputation will be at stake.
For more details on stamp duty charges, walk into the nearby property registrar's office or talk to a registered property consultant today.
No, stamp duty charges are not refundable.
Yes, up to a limit of Rs.1,50,000, stamp duty can be claimed as a tax deductible under Section 80C of the Income Tax Act.
Until now, stamp duty and GST have been separate taxes levied on the sale of properties and have had no impact on one another.
Stamp duty and registration fees are typically not included in the amount of a house loan approved by a lender. The buyer is responsible for this out-of-pocket expense.
Madhya Pradesh has the maximum stamp duty charges in India, I.e., 9.5%.
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