Comprehensive Guide on Stamp Duty Rates for Homebuyers

Stamp Duty is the tax that buyers pays to the Government while purchasing property which may fall under Residential, Commercial, freehold or leasehold. This duty is a kind of direct tax which is levied on the property buyers and the percentage of this tax varies from State to State as there are several factors to be considered before finalizing the Stamp duty percentage. So, if you are also an aspiring home buyer then here are things to know about Stamp Duty:

Stamp Duty

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1. Stamp Duty Calculation:

The stamp duty is calculated on the higher value of a property which is compared between the property price documented in the agreement and the Circle rate of the area in which the property is located. The circle rate is also known as the Ready Reckoner Rate [RRR].

Usually, the Stamp duty charge ranges from 3% to 10% depending upon the State Government and the property buyer has to make payment for the same.

For example, you purchase a property worth Rs. 45,00,000, the Circle rate of the locality is 40,00,000 and the stamp duty charge is 5%. Then, you are required to pay Rs. 2,25,000 as the stamp duty. This is so because the property cost is greater than the circle rate and hence it is calculated on the basis of property value.

2. Factors Considered While Calculating Stamp Duty Rate:

The authorities focus on the below-mentioned six points while fixing the percentage for Stamp duty. These six main points are as follows:

Construction Status

Age of the property whether it is under construction, newly constructed or is an old building.

Property Locality

The stamp duty percentage largely depends upon whether the property falls in an Urban, Rural, Suburb or Metropolitan area.

Owner’s Age

The senior citizens can also avail rebate in stamp duty charges in some states.

Owner’s Gender

Women property owners also get deductions on Stamp duty.

Property Type

The stamp duty percentage is different for both flats and Independent villas.

3. Payment Procedure for Stamp Duty

There are three ways to pay stamp duty which are:

  • Non-Judicial Stamp paper Method –

    This is an agreement written on a paper with all details related to property and is duly signed by the concerned authority. The property buyer is also required to get the same paper registered within four months from signing with the Sub-registrar office.

  • Franking Method –

    In this method, the property buying-selling agreement is written on a plain paper and then is submitted to the concerned bank. The bank then processes this paper through a franking machine and the payment of the stamp duty charge is completed.

  • E-Stamping Method –

    With the introduction of online payment system, the payment of stamp duty has also become easier. So, you can now pay this amount by using RTGS/NEFT. You can download the dated Stamp Duty certification after the payment of the same is processed.

4. In case of Paying Insufficient Stamp Duty Charge

It is unlawful to pay insufficient stamp duty charge and if a person held for doing so then he/she will undergo the punishment provisioned according to the law. As the payment of an inadequate stamp duty amount is a direct revenue loss to the Government hence the person doing so can be penalized with imprisonment or paying 8-20% higher stamp duty charge than the original stamp duty.

5. Rebate on Stamp Duty:

The female property buyers can enjoy deductions under the stamp duty in some states as the Government of various states offers a rebate to women property buyers on the same.

6. Stamp Duty Percentage in Major Cities:

                      

City

 

Stamp Duty Rate

 
Delhi 
 

4% – 6%

 
Mumbai 
 

3% -5%

 
Bengaluru 
 

5%

 
Pune 
 

3% -5%

 
Hyderabad 
 

4%

 
Chennai 
 

7%

 
Ahmedabad
 

4.90%

 
Kolkata
 

5% – 7%