Stamp Duty is a kind of Tax
Yes! It is MANDATORY
When any residential or commercial property in India is transferred from one person name to another, the government levies a tax duty on it, which is named as stamp duty. This tax duty can be levied on any kinds of leasehold and freehold properties. Hence, whenever you are planning to buy a home, you must be ready for such a tax.
State government levy stamp duty and its rates vary from State to State. Other than there is another very essential aspect that one must be careful while selling or purchasing a property in India. You need to be very conscious regarding such legal rules and taxes to be safe. Same like stamp duty, the registration charges also vary from State to State. Let us understand about both these necessary legal documentation in detail.
Stamp duty: Whom are you paying this to?
Based on the property sale agreement at the time of registration, the tax is paid to the State government, which needs to be paid within the defined time in full amount. Only after the payment of the amount in the documentation related to the taxes, the sale agreement is supposed to be legal as well as official.
You can pay this tax amount either before or on the same day when the sale deed is executed. As stated above, stamp duty rates vary from State to State.
Of course, it is subject to change
Value of collector tax is calculated based upon the agreed value amount or the rates decided by the particular State government – whichever is higher. This stamp duty rate is bound to vary from time to time, and also there is no fixed time period for the charges to be revised by the State government.
Registration: Now what is that?
Registration of property is the full and final legal agreement between the buyer and the seller, which implies the change of ownership and transfer of the property.
The property can be registered under the name of the new holder of the property only if the stamp duty is paid, and documents are legalized. Hence, registration is only possible after paying the stamp duty charges.
The general way for registration of property in India includes the following steps.
- Estimation of the value of the property and land
- Comparing the circle rates with the actual rates (which covers stamp duty rates)
- Purchasing the stamp papers after paying the tax amount
- Approaching the sub-registrar’s office to collect the sale deed
- Receiving a verified registration deal copy according to the registry details and also the date from the registrar’s office
Following these steps, the selling and buying procedure of any property in India can be made simpler and also free from any kind of risks and cheating.