Check out Stamp Duty and Registration Fees

Stamp Duty and Registration Charges

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Hunting for the right property and finding the one that works for you is an arduous task, but it is only the beginning of your ownership process. After buying a property, you have to register it. So the price at which you buy the property, let’s say your house, isn’t the final amount. More charges are added to that price as the stamp duty and registration fee.

 

Practically speaking, you should be prepared to lighten your bank accounts by up to 7% of the total market value of your purchased property as the stamp duty charges and around 1% as the registration fee.

Stamp Duty and Registration Charges in Different Cities

The exact charges you need to pay for property registration and stamp duty vary across different cities in the country. These charges are calculated as a percentage of the total market value of the property for which these are being paid. Here are a few examples of the major metro cities of the country:

City

Stamp Duty

Registration Fee

Bangalore

5%

1%

Delhi

4% if the Owner is a Woman

6% if the Owner is a Man

1% plus ₹100 pasting charge

Chennai

7%

1%

Mumbai

4% for Rural Areas.

5% for Municipal areas

1% or ₹.30,000, whichever is lesser.

Kolkata

5% for rural areas

6% for municipal areas

1% (charged only when the value of the property exceeds ₹40 lakhs)

What is Property Registration

Property registration, in simple words, means the transfer of the title of property from its previous owner to the new owner (in whose name the property is being registered). The process involves the registration of the property documents in the name of the new owner as per section 17 of the Registration Act, 1908.

What is Stamp Duty

In order to complete the registration process of a property, the new owner of the property is required to pay two types of fees to the concerned state government- the stamp duty and the registration fee. Stamp duty can be paid in multiple ways such as by simply purchasing physical stamp papers, paying the e-stamping fee or paying the franking fee to a franking agent. Make sure that you pay the full stamp duty charges to stay out of any kind of trouble.

Documents Required for Stamp Duty and Registration Charges

It is important to know what all documents are needed while paying the stamp duty and registration fee for your newly purchased property. Here’s a handy list:

 

  • Sale deed in the name of the seller and the title documents of the landowner

  • Tax receipts of the last 3 months and the latest bank statements in case of any outstanding loan amount

  • Registered development agreement (in case the agreement is with regards to Joint Development Property)

  • Power of attorney(s), if any

  • A Copy of all previously registered agreements (in case of resale property)

  • RTC (Records of Rights and Tenancy Corps)

  • Certificate of encumbrance up to the current date.

  • Electricity bill

There are certain documents to be obtained from other stakeholders too. These may include an NOC from the apartment association where the property is located, a sanctioned building plan, an occupancy/possession certificate from the builder, society registration and share certificates if it is a cooperative group housing society.

Procedure to Pay the Stamp Duty And Registration Charges

The stamp duty for a property can be paid in any of the following three modes of payment:

 

  • Physical Stamp Papers: This is the classic way of property registration. You purchase the non-judicial stamp paper and get the details of the transaction typed on them. The amount of stamp duty to be paid determines the number of stamp papers you are required to obtain.

  • E-Stamping: As the name suggests, e-stamping is basically stamping done electronically, or online. The Stock Holding Corporation of India Limited keeps track of all the e-stamped papers. It makes the process easier and prevents counterfeiting.

  • Franking: The third mode is franking, which is simply the process of an authorised franking agent putting a stamp on the document to confirm that you have paid the stamp duty. These agents (usually banks) have a franking machine that is used to lace the document with a special adhesive stamp. Franking charges are paid separately but are adjusted against the overall amount of the stamp duty.

Factors that Determine the Stamp Duty

The stamp duty applicable on the purchase of a property is determined by a number of factors. Here is a list of some of the factors that determine the stamp duty that you would have to pay on your new property:

 

  • As explained earlier, stamp duty and registration fee are a percentage of the total market value of the property. Keeping that in mind, newer buildings will attract a higher fee than the older ones whose values have depreciated over time.

  • The age of the owner also affects the stamp duty and the registration fee if the state government grants some subsidies on the charges to senior citizens.

  • The gender of the owner is also a factor if the state government charges different rates from men and women.

  • The use or purpose of the property also impacts the stamp duty to be paid. As a norm, commercial properties attract higher charges and restrictions compared to residential buildings owing to the need for amenities, advanced services and security.

  • In certain cities like Mumbai, a property located in a posh, urban area can attract a higher stamp duty than a property on the outskirts of the city.

  • The stamp duty charges applicable on a property are also influenced by the availability of amenities such as a library, swimming pool, gym, community hall etc.

How is Property Registration Calculated

The property registration/land fee is calculated based on the market value or the agreement value of the property, whichever is higher. Generally, stamp duty officials use the Stamp Duty Ready Reckoner published by the concerned state government to fix the value of a property.

Apart from the value of the property, other factors such as the location of the property, the number of floors in the property, usage of the property, gender and age of the buyer also determine the registration fee applicable.

What Happens if You Pay Inadequate Property Registration Fee

Many times, buyers underquote the price of the property so that they have to pay a lesser registration fee and stamp duty. Doing so is however a punishable offence and may result in hefty fines and even imprisonment. Therefore, it is always advisable to pay the full registration fee and stamp duty as applicable on your property as a responsible citizen.

How to save on Property/Land Registration Charges

While it is not advisable to undervalue your property to save on the registration fee/stamp duty, there are many legal ways you can bring down the registration fee/stamp duty:

 

  • Register the Property in the Name of a Female Member/Senior Citizen: Since there is a provision in many states that women and senior citizens have to pay a lower registration fee/stamp duty on property purchases, getting your property registered in the name of a female member or an elderly member of the family can save you some money on stamp duty/registration fee.

  • Buy Property in a Building with Fewer Number Floors: If you are buying a property in a multistory building (say an apartment), prefer one in a building with a lesser number of floors for a higher registration fee is applicable on properties in a building with more floors.

  • Choose Location Wisely: You can also save on the registration fee/stamp duty by choosing the location of the property wisely. If your property is in a remote area or on the outskirts of the city, the registration fee applicable will be much lesser than what you have to pay for a property located right in the middle of the city.

  • Make it a Gift Deed: If you are buying the property from a family member, mention the same while registering the property. In that case, the property will be considered a gift deed and a much lower registration fee will be applicable.

Top Cities Stamp Duty and Registration Fees and Charges

Below mentioned are theTop Cities Stamp Duty and Registration Fees and Charges:

Conclusion

Whenever you buy a new property, you are supposed to pay stamp duty and a registration fee to the concerned government. These fees are levied by the state government for the development of the state. You must pay the stamp duty as applicable on your property in full to avoid any possible legal consequences. If you are considering availing a home loan, you can easily avail one at Bajaj Markets at affordable rates of interest.

FAQs on Property Registration Fees and Stamp Duty Charges

  • ✔️How are stamp duty and the registration fee calculated on the property?

    The stamp duty and the registration fee applicable on the purchase of a property are primarily based on the market value of the property. Some other factors such as the location of the property, number of floors, age and gender of the buyer also impact the registration fee and stamp duty.

  • ✔️Can stamp duty be claimed as a tax deduction?

    Yes, the stamp duty and the registration fee can be claimed as an income tax deduction under Section 80C of the Income Tax Act. A maximum deduction of ₹1.5 Lakhs can be claimed under this provision.

  • ✔️Is stamp duty refundable?

    Since the stamp duty is collected by the state governments, the rules for the refund of the stamp duty paid are different in different states. For example, in Maharashtra, stamp duty can be refunded within six months of its payment. The government however deducts 1% of the amount before refunding (min ₹200 and max ₹ 1,000).

  • ✔️Does stamp duty include GST?

    No, stamp duty does not include GST. The GST (as applicable on the property purchase) and the stamp duty have to be paid separately.