What are Stamp Duty Rates and Charges on Land / Property?


Stamp duty, nrihelpinfo, nris

The government levies a mandatory tax on the transfer of rights in a property, named as stamp duty. The state levies a tax when there is a transaction of the property say when property changes from the seller to the buyer. This tax is known as stamp duty or stamp fees.

It is levied on commercial and residential property transactions, as well as leasehold or freehold properties. States levy stamp fees and hence, the rate differs from state to state.

How to calculate the stamp duty amount?

Its range varies from 3 per cent to 10 per cent, depending on the slab decided by the special state. The responsibility of paying the stamp fees usually belong to the buyer of the property.

It is calculated on the higher rate, between the ready reckoner rate (circle rate) and the agreement value of land. For instance, if the contract value of a property is Rs 50 lakhs and the ready reckoner rate (circle rate) is Rs 40 lakhs, then, the stamp fee would be determined by the larger value, i.e., Rs 50 lakhs.

The stamp duty percentage depends on various factors, such as:

  • Status of the land or property – whether it is new or old.
  • Location of the property – suburban, metropolitan area, rural area, city area etc.
  • Age of the owner – depreciation may be possible for senior residents in some states.
  • Gender of the real estate owner – some countries also grants concessions for female estate buyers.
  • Usage of property – whether it concerns residential use or commercial use.
  • Type of land or property – An independent house or flat, etc.

How is stamp duty paid?

There are three methods to pay the stamp duty – by franking method, by using the e-stamping or through non-judicial stamp paper way.

  • Under the non-judicial stamp paper process, the agreement details are defined on such paper, and it is approved by the executants. After that, within four months, it is needed to be enrolled at the sub-registrar’s office.
  • Under the franking way, the contract is printed on plain paper. This document is provided to an authorized bank, which processes the papers through a franking machine.

In some of the nations, you can also pay the requisite government fee online, through RTGS and NEFT. After that, the stamp duty certificate, with features such as stamp duty type, the date etc., can be downloaded for the registration manner.

What will happen, if you pay inadequate stamp duty?

In several circumstances, for saving stamp fees, people show an undervalued property cost, in the agreement. The state experiences revenue loss, because of such tax evasion.

If you pay inadequate stamp fees, then, you can be punished heavily for the evasion. The penalty and punishment for stamp duty evasion may fluctuate from state to state. The penalty can reach from 8 per cent to 20 per cent of the actual government fees, with minimum fine limits and imprisonment for some periods, as per the country’s rules.

How to save on stamp fee charges?

Some states provide notable discounts on the stamp fees, for female clients. Thus, if you are looking to save on government fees, you can buy the property in the name of any female family member. If you have shortlisted certain locations for your property purchase, you can match the stamp duty charges in the several locations, to decide which location allows the lowest stamp fees value.

The property fraternity has also been asking that affordable housing be exempt from stamp fee prices. If this happens, buyers in this section can save a substantial cost. Sometimes, real estate developers agree to bear the expense of stamp duty and registration charges. Nevertheless, you need to be careful that you do not get charged for it in indirect methods.

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What are Stamp Duty Rates and Charges on Land / Property?

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