No matter what type of property you buy or sell, stamp duty is a term you will come across. In fact, it isn’t just a buzzword in real estate, it’s a tax levied on any property that has a change in the title.
Before we discuss the charges that different state governments charge on stamp duty in India, let’s figure out what stamp duty really is, who pays it, and how it’s calculated.
What is Stamp Duty
As per the provisions of Section 3 under the Indian Stamp Act 1988, tax is levied on the sale, rent, leasing of property in India. This tax is a charge that each state government levies as per its own volition.
Stamp papers are bought by either the seller or the buyer of the property and are valid for up to six months after the payment of the stamp duty charges is made in full.
When you buy property, receiving possession is a major aspect of the transaction. However, to also be a legally recognized transfer of ownership, the property then needs to be registered.
During this registration, your property registration documents are stamped by the regulatory authority. This Stamp makes the document admissible in court as evidence for any future use. Any document not stamped and fully paid (stamp duty) for does not have evidentiary value.
Also Read: Difference Between Market Value And Fair Value
Stamp Duty Payment Registration, Liability, and Documents Required
Stamp duty is due on a document before it is signed by either party involved in the transaction. It can also be paid on the date the agreement is signed. Post that, a penalty is levied over the stamp duty charges. These charges are 2% of the stamp duty charges and can only be charged up to a maximum of 200%.
In most cases, the buyer is liable to pay the stamp duty on the purchase of a property. The liability of registering the stamp duty to make an official change in ownership of property in the concerned municipal records is also on the buyer.
The following factors directly affect stamp duty registration in India:
- Gender and age of the owner
- Property Usage
- Location of the property
- Value of the property
- Age of property
The following documents are required to register for stamp duty:
- Deeds of Lease
- Certificates related to sale of property
- Gift Deed
- Title Deed
- Exchange Deed
- Tenancy Agreement
- Power of Attorney
- License Agreement
- Mortgage Deed
- Reconveyance of Mortgaged Property
Also Read: Sale Deed Agreement
How is Stamp Duty Calculated
The Stamp Duty charges don’t only vary from state to state but also from property to property. There are various factors that affect the stamp duty charges levied on a property. The following are the most important factors that affect stamp duty in India:
1. The regulatory authority in your city allots a “Guidance Value” to your property. This is the minimum value at which your property has to be registered. The stamp duty is calculated on the basis of the Guidance Value of your property.
2. Stamp duty charges also vary depending on the location of the property, i.e. urban or rural.
3. The market value and market performance of your property will also be taken into consideration while calculating the stamp duty charges on it.
4. Senior citizens and women are also given rebates on stamp duty.
5. The usage of property might also increase or decrease the stamp duty charges.
Stamp Duty Rates in the Indian States
State | Stamp Duty Charges |
Andhra Pradesh | 5% |
Arunachal Pradesh | 6% |
Assam | 8.25% |
Bihar | Ownership transfer Male to Female 5.7% Ownership transfer Female to Male 6.3% Ownership transfer in other cases 6% |
Chhattisgarh | 5% |
Goa | Property Price up to Rs 50 lakh 3.5% Property Price Rs 50 - Rs 75 lakh 4% Property Price Rs 75 - Rs 1 crore 4.5% Property Price over Rs 1 crore 5% |
Gujarat | 4.9% |
Haryana | Male Owner 7% Female Owner 5% |
Himachal Pradesh | 5% |
Jammu and Kashmir | 5% |
Jharkhand | 4% |
Karnataka | Property Price above Rs 45 lakh 5% Property Price Rs 21-45 lakh 3% Property Price less than Rs 20 lakh 2% |
Kerala | 8% |
Madhya Pradesh | 7.5% |
Maharashtra | Male Owner 5% Female Owner 4% |
Manipur | 7% |
Meghalaya | 9.9% |
Mizoram | 9% |
Nagaland | 8.25% |
Odisha | Male Owner 5% Female Owner 4% |
Punjab | Male Owner 7% Female Owner 5% |
Rajasthan | Male Owner 5% Female Owner 4% |
Sikkim | Sikkimese Origin Owner 4% + 1% 9% + 1% |
Tamil Nadu | 7% |
Telangana | 5% |
Tripura | 5% |
Uttar Pradesh | Male Owner 7% Female Owner 7%-Rs 10,000 |
Uttarakhand | Male Owner 5% Female Owner 3.75% |
As you can see, stamp duty rates do not only vary as per the state but might also vary within a state depending on your age or gender.
Stamp duty is one of the most important documents that mark the legal changing of ownership and thus should not be taken lightly. The stamp duty rates are included in costs known as the closing costs of a property and not in the property value. Make sure you pay your stamp duty on time and keep the stamp paper safe in case any disputes arise over the property in the future.
Also Read: Verify your flat purchase without a Lawyer