A Guide to Stamp Duty for Homebuyers | State-Specific Stamp Duty Payment
One of the most difficult tasks in the real estate industry is investing in a new property. The process of purchasing a piece of property entails several tedious steps, such as investigating the area and gathering all required paperwork in the right order. However, it is also our responsibility as informed consumers to adhere to all rules and understand the legal framework. The payment of registration fees and stamp duty is one of such legal procedures.
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These fees are typically assessed in order to verify your real estate transaction and register the property in your name. Additionally, these fees may differ depending on the nature, location, and other characteristics of the property. We learn about these stamp duty fees through this blog, along with everything else you need to know. So be sure to read all the way through.
What exactly is the Stamp Duty Act?
According to Section 3 of the Indian Stamp Act of 1899, stamp duty is a required levy that is imposed to ensure the legitimacy of the financial transaction and increase local government revenue. Additionally, these fees must always be paid instantly and in full. Usually, a penalty cost is assessed in the event of a delay. However, if the buyer refuses to pay the fees, the purchase of the property is deemed against the law.
When Do You Have to Pay Stamp Duty Fees?
In India, stamp duty fees must be paid before a financial transaction to purchase a property is finalised. Although, in other circumstances, the buyer pays these fees the following day or at the time the property’s legal documents are signed. In the event of additional postponement, the buyer might be liable for either a maximum fine of 200% of the remaining stamp duty sum or a monthly fine of 2%.
Payment of stamp duties between states
Now that you are aware of what stamp duty is and how important it is, let’s discuss how to calculate it. You may calculate the stamp duty costs for your property using a stamp duty calculator. But before you do that, it’s important to understand that these fees, as well as the payment portals used in each state, vary. For larger states, different localities may also have their own websites where you can pay the stamp duty & registration costs for your property.
The top states, cities, & their official stamp duty websites are included in the following table.
Documents That Require a Stamp
There are a few certain sorts of documents that are subject to stamp duty when it comes to fees associated with real estate. The following list includes a few of the documents:
- Certificates of Sale Deed
- Mortgage Deed
- Exchange Deed
- Tenancy Agreement
- License Agreement
- Surrender of Lease
- Lease Deeds
- Transfer of Lease
- Power of Attorney
- Agreement of Sale
- Gift Deed
- Deed of Partition
Indian Stamp Duty Rates
In India, stamp duty & registration fees typically differ from one state to the next. In addition to this, a number of additional factors can influence the costs for a particular property. Let’s examine the stamp duty rates in different Indian states:
| State | Stamp Duty Charges |
| Rajasthan | 11% of the property’s market value |
| Tripura | 5% of the consideration |
| Assam | 8.25% of the consideration |
| Uttar Pradesh | 8% of market value or consideration |
| Daman & Diu, Goa | 8% of the consideration |
| Punjab | 6% of the consideration |
| Maharashtra | 10% of market value |
| Bihar | 7% + 2% duty on transfer (within Municipal limits) |
| Jharkhand | 7% + 2% duty on transfer |
| Gujarat | 3.5% + 1.4% surcharge |
| Chhattisgarh | 7.5% of the property’s market value |
| Nagaland | 7.5% of the consideration |
| Madhya Pradesh | 7.5% of the property’s market value |
| Kerala | 8.5% on transfer of immovable property |
| Delhi | 3% stamp duty + 5% surcharge as per DMC Act, 1957 |
| Tamil Nadu | 8% of market value |
| Haryana | 12.5% of the consideration |
| Meghalaya | 9.9% (above Rs 1,50,000) of consideration |
Factors Affecting the Rates of Stamp Duty
Not only are stamp duty fees indicated when a property is sold. Instead, these fees are assessed when all sorts of conveyance transactions are registered. These fees therefore apply to numerous categories of additional documents. But what elements have the biggest impact on these fees? Let’s investigate:
- The property’s market value and bank value
- Property buyer’s age and gender
- City or Location of the property
- Property’s usage
- Age of the property
Possible Reductions in Indian Stamp Duty
The majority of state governments often provide people with a variety of discounts on stamp duty & registration fees. In fact, many states have also decreased their fees for women solely to promote female home ownership. Additionally, every buyer of real estate is eligible to claim a certain percentage of relaxation on their acquisition under Section 80C of the Income Tax Act. Purchasers can also speak with their city’s state tax officials to learn more about these incentives.
Conclusion Stamp Duty Fees
As we have established, the Indian Stamp Act of 1899 requires that all buyers of real estate pay their stamp duty fees. Although these fees may differ from one place to another, the country’s central government typically chooses the 2% fine each month. Furthermore, these fees not only apply to the acquisition of real estate but also to the registration of all conveyance transactions.
Many state governments recently reduced the stamp duty they charge female property buyers. The costs associated with buying the property might also be influenced by its location, age, and usage. Despite the fact that these fees are required, buyers may seek for discounts under Section 80C of the Income Tax Act. However, it’s important to remember that these exceptions do not permit you to disregard these rules, and doing so could result in more legal issues and difficulties.
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