Stamp Duty and Property Registration Charges in India

Did you know that when you buy a house, you'll have to pay stamp duty, registration fees, taxes, and surcharges?

Yes, the overall cost of the charges might be as much as 7% to 10% of the property's total market value, if not more. Stamp duty ranges from 5% to 7% of the total market value of the property in most Indian states, while registration fees range from 1% to 2%.

In this article, we will discuss the stamp duty, property registration, the fee and charges in India associated with them, and other important aspects in detail.

Stamp Duty and Registration Fees In India

Given below are the stamp duty and registration charges in different cities across India:

Location Stamp Duty Charges Property Registration Charges
Bangalore 2% to 5% 1% of the property market value
Delhi 4% to 6% 1% of the deal market value
Mumbai 3% 1% of the property market value
Chennai 7% 1% of the property market value
Kolkata 5% to 7% 1.1% of the total property market value

Different Factors to Determine Stamp Duty Charges in India

Advances can be segregated into the following types:

  1. Age of the Property: The age of the property has a significant impact on the stamp duty rates you'll have to pay. Because stamp duty is computed as a percentage of the overall market value of the property, historic structures normally have lower stamp duty costs while newer buildings have higher stamp duty rates. Because the market worth of historic buildings has decreased.
  2. Owner's Age: Stamp duty fees for senior citizens are almost always subsidized by state governments. As a result, the owner's age plays a significant influence in calculating the fee.
  3. Gender of the Owner: Women in our country, like senior citizens, are eligible for a stamp duty rebate if the property is registered in her name. When compared to women, men pay around 2% more to get their property registration documents stamped.
  4. Type: When opposed to residential structures, commercial buildings have a higher stamp duty levy. This is because commercial structures require a lot of facilities, floor area, and security elements.
  5. Location: Prepare to pay high stamp duty if your property is located in a municipal jurisdiction or an upmarket urban district. If your property is in the Panchayat limits or on the outskirts of town, you will pay less for it.
  6. Amenities: Did you know that the government would charge you for each additional amenity on your home when you register it? Yes, the government maintains a list of more than 20 facilities for which you would be charged a fee if they are present on your land. Lifts, a swimming pool, a library, a club, a gym, a community hall, and a sports area are among the attractions.

How to Calculate Stamp Duty and Property Registration Charges?

A number of factors influence the amount of stamp duty you may have to pay. Stamp duty is determined as follows:

  • Considering the property's overall market worth is important. If your property's market worth is high, you'll have to pay a hefty fee and vice versa. If the property has both a market value and an agreement value, the higher of the two will be charged.
  • Apart from the property's cost or worth, the type of property, its location, the owner's gender, and age, the property's use, and the number of floors in the property all influence the property registration fee and stamp duty payments.
  • Stamp duty officials usually utilize Stamp Duty Ready Reckoner to determine the property's value. Every year on January 1st, the concerned state government publishes the Stamp Duty Ready Reckoner.

How to Make the Stamp Duty and Registration Fees Payment?

There are three options for paying stamp duty. They are as follows:

  1. Stamp paper in the physical form -
    • This is the most common method of stamp duty and registration fee payment.
    • You can buy non-judicial stamp paper from a licensed dealer. Papers with impressed duty stamps are known as non-judicial stamp paper.
    • The transaction details can be written/typed on the stamp paper once it has been purchased.
    • It's not easy to find a seller who sells this type of stamp paper. Furthermore, such paper is frequently in low supply. If you have a large quantity of stamp duty to pay, you may need a lot of stamp papers.
    • As a result, many people dislike this method.
  2. Franking -
    • This is a procedure in which an authorized franking agency stamps your document to indicate that stamp duty has been paid.
    • You should visit an authorized bank that will function as a franking agent, or a franking agency, to deposit the stamp duty before you complete the transaction for which stamp duty must be paid (usually this will be before signing on the document).
    • After you pay the stamp duty, a franking machine will use a specific adhesive stamp to frank the document.
    • There will be a minimum amount for franking in each state. In Bengaluru, for example, minimum franking charges are set at 0.1 percent of the agreement value. So, if you're buying a house for Rs. 50 lakhs, you'll have to pay a franking fee of 0.1 percent, or Rs. 5,000.
    • This sum, however, will be deducted from the stamp duty when you sign the selling deed.
  3. E-stamping -
    • E-stamping is mandatory in some states.
    • E-stamping is simply stamping done via the internet.
    • The Stock Holding Corporation of India Limited (SHCIL) has been named as the official e-stamping vendor, as well as the Central Record Keeping Agency for all e-stamps used in the country.
    • To accomplish e-stamping, you must first go to the SHCIL website.
    • To determine if e-stamping is permitted in your state, select it. You will receive details on the transactions that must be e-stamped as well as a list of collecting centers that will issue certificates to those who e-stamped.
    • Fill up the application form and return it to the collecting center with the stamp duty payment.
    • You can pay using a variety of methods, including debit cards, credit cards, checks, demand drafts, and internet banking.
    • You will receive the e-stamp certificate once you have paid the stamp duty. The issue date will be included in the certificate's unique certificate number (UIN).
    • E-stamping has the advantage of being convenient.
    • Another advantage is that the UID number can be used to verify the authenticity of your e-stamp online.
    • However, the disadvantage of e-stamping is that you will not receive a duplicate of your e-Stamp.

It's important to understand that not all states will have all three techniques. If all three options are available, you can select the one that best meets your needs.

After paying the stamp duty, the document must be registered with a sub-registrar under the Indian Registration Act. If the transaction involves the purchase of the real estate, the registrar should be from the jurisdiction where the property is located.

The registration charge is paid in addition to the stamp duty. This cost differs from one state to the next. In Karnataka, for example, the registration cost is set at 1% of the transaction's value.

Conclusion

It's worth noting that unless your name appears in government records as the owner of a specific property, proving ownership may be difficult. As a result, property registration is a requirement for the buyer.

Furthermore, because unregistered properties have no legal standing, the owner risks losing the property even if he is in possession of it. The owner would not be entitled to seek compensation if the government were to buy this property at any point in the future to undertake an infrastructure project.

Stamp Duty and Registration Charges - Related FAQs

The charge for registering property documents is one percent of the property's worth, up to a maximum of Rs. 30,000.

In general, stamp duty is a government-imposed tax on real estate transactions. Simply having physical possession of a real estate property, such as a house, is insufficient. You must also have proof of legal ownership of the property, for which stamp duty and registration fees must be paid.

The state government is responsible for levying and collecting stamp duty, which differs from state to state as per the constitutional framework. Furthermore, stamp duty is calculated based on the property's valuation, which is determined by characteristics such as the property's kind (residential or commercial), age, and location.

Because it increases the overall property cost, it is critical to understand and integrate it into your financial planning architecture when purchasing a home.

When a property buyer acquires a piece of land or immovable property, he or she must register it with the appropriate authority.

When a property is registered, it implies that the property buyer whose name is on the title is the legal owner of the property and is accountable for it in all ways. A person can obtain the rights to the property on the day of the deed's execution by registering a Sale deed.

Section 17 of the Indian Registration Act, 1908, makes it mandatory to register documents relating to the transfer, sale, lease, or any other form of property disposal.

The registration's goal is to prevent fraud while also creating and maintaining an up-to-date public record. The registration can take place at the property's Sub-Registration Office or at the District Sub-Registrar Office of the District where the property is located.

Aadhaar Card, PAN Card, or any other government-issued proof of identity are among the documents that can be used for this purpose. If the signatories are acting on behalf of someone else, they must additionally show the power of authority papers.

Failure to register a property purchase agreement could put you in danger. Any document that is legally needed to be registered but is not admissible as evidence in any court of law.

Documents requiring registration must be submitted for registration within four months of completion, together with the required cost.