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Stamp duty and registration charges are mandatory: Buyers should take utmost care on this front

LegalKart Editor
LegalKart Editor 04 min read 153 Views
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Buying as property is always a delightful feeling for a buyer and his or her family members. However, the property buying process tends to be a little tedious than expected. The buyer ends up paying several costs in addition to the cost of property itself. While there could be many cost elements that a buyer needs to take into account while buying a property, in this post we share insights on one of the most important and mandatory cost elements – stamp duty and property registration charges.

 

What is stamp duty and property registration charges?

Stamp duty is defined as a charge that is levied by the state government on the total value of property that a buyer is purchasing from a seller. The stamp duty usually varies from one state to the another and as per the Indian Stamp Duty Act 1899, it is mandatory for the buyer to pay the amount to the designated state government department for getting the stamp paper and registry of a conveyance deed or sale deed, as the case may be. The stamp duty charge can range from 1 percent to as high as 9 percent of the property value.

Also Read: How to get your property valuation done to ascertain a correct market price 

On the other hand, registration fee is a charge levied by the state government for maintaining the record of the property and its sale document (conveyance deed or sale deed, as the case may be) as per the Registration Act, 1908. The registration fee charges are usually 1 percent of the property value and may be changed by the government from time to time. Paying the registration fee is also a mandatory requirement before a buyer can get the conveyance deed or sale deed registered in the designated sub-registrar’s office.

 

Stamp Duty and Registration Charges in select Indian cities and states

It is imperative to know that no buyer can skip paying this vital cost element while buying a property in India, irrespective of the state or city in which the immovable property is located. The tables below show city and state wise stamp duty and registration charges:

Also Read: Planning to transfer a property? Know the process and costs involved

City Wise

City

Stamp Duty

Registration Charges

Bangalore

2% to 5%

1% of property value

Delhi

4% to 6%

1% of property value

Mumbai

3% to 6%

1% of property value

Chennai

1% to 7%

1% to 4% property value

Kolkata

5% to 7%

1% of property value

Gurgaon

3% to 7%

Rs. 50,000

 

State Wise

State

Stamp Duty

Registration Charges

Haryana

3% to 7%

Rs. 50,000

Gujarat

4.9%

1% of property value

Kerala

8%

1% of property value

Maharashtra

5%

1% of property value

Tamil Nadu

7%

1% of property value

Uttar Pradesh

7%

1% of property value

West Bengal

7% to 8%

1% of property value

Rajasthan

5% to 6%

1% of property value

Telangana

5%

1% of property value

Uttarakhand

5%

1% of property value

Note: The details mentioned above are in force as on today. However, the government may change the rates as and when deemed necessary. It is advisable that buyers should visit the respective state government website for latest rate updates while buying a property. It is also advisable to consult a qualified property lawyer for making correct calculations of these charges before making the payment to the state government.

Also Read: Stamp duty and registration charges are mandatory: Buyers should take utmost care on this front  

Why it is important to consult a property lawyer before paying the stamp duty and registration fee charges?

While the information mentioned in the above tables appear simple and straight forward, calculating the correct amount of stamp duty charges and registration fee can be a tricky affair. There are a few important factors related to the property and its buyer(s) that one needs to consider before arriving at a correct figure:

  • Status of property – new or old construction
  • Area – metro city, rural, urban or suburban
  • State where the property is located
  • Age of the buyer(s) – adult or senior citizen
  • Gender of the buyer(s) – male or female
  • Use of property – residential or commercial or mixed
  • Type of property – independent house or flat or floor
  • Ownership – single or joint owner

 

Most buyers are not aware of the stipulations and the factors as mentioned above. As a result, they may end up making wrong calculations in the process themselves. Incorrect calculation will surely lead to unnecessary and sometimes very unpleasant complications at the time of registry. Hence, it becomes imperative to take help from a knowledgeable property lawyer or advocate for getting these important calculations right in the first place.

 

A qualified legal professional is in a position of making correct calculations as mandated by the state government, thereby eliminating any stamp duty default risks in the process. Not only this, but the lawyer will also be able to assist you in making or transferring the payments to the correct state government’s bank account. Once the payment is made, the lawyer will help in getting the payment receipts from respective government department that are mandatorily required at the time of registry along with all other important property documents. Additionally, the property lawyer will procure the stamp paper based on stamp duty and registration fee payments and also assist in taking appointment from the sub-registrar’s office for proper execution of the conveyance deed or sale deed, as applicable.

Also Read: How to get your property valuation done to ascertain a correct market price 

 

A buyer must at all times remain pragmatic while paying the stamp duty and registration fee charges to the respective state government. At any given point in time, making an attempt to reduce property buying cost by paying incorrect stamp duty and registration charges, can only prove to be a costly affair for the buyer. Buying your own home is once in a lifetime experience and should be done with utmost care and diligence. Involving and consulting a property lawyer in the process is the only prudent thing to do.

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