Stamp duty on real estate transactions is a fee that has to be paid during the transfer of an asset from one person to another based on the total declared value of the property. It is governed by Section 3 of the Indian Stamp Duty Act, 1899. In India, stamp duty charges may differ from four to 10 per cent across states. In simpler terms, if stamp duty is charged at 4 per cent in your city, you have to pay Rs 4 for a property worth Rs 100.
If you are buying a property in Ahmedabad, you will have to pay a stamp duty at the rate of 4.9 per cent. This rate, in the industrial hub of Gujarat, is one of the lowest among the major cities of India.
In India’s information technology capital, you need to pay a stamp duty charge of 5.6 per cent in urban areas and 5.65 per cent in rural areas. When compared to its other peers, property in Bengaluru attracts a lower stamp duty rate that most cities.
In the Tamil Nadu capital, for a property in Chennai, you will have to pay seven per cent of the total property value as stamp duty charges.
Stamp duty in Gurgaon is different for the different segments and types of buyers. While you have to pay a six per cent stamp duty for property in Gurgaon rural, the charges are kept at eight per cent for transactions in urban areas. For registering a gift deed, you have to pay a stamp duty of three per cent in rural areas and five per cent in urban areas. However, if the sale deed is executed in favour of a woman, the stamp duty charges in Gurgaon are four per cent in rural areas and six per cent in urban areas.
You have to pay a stamp duty of 7.5 per cent to buy a property in Hyderabad, the city of Nizams.
In the West Bengal capital, for a property in Kolkata panchayat area you have to pay a stamp duty of five per cent of the value of the property, and six per cent in municipal areas and corporation areas. Last year, the city administration notified that you would have to pay an additional one per cent stamp duty in both urban and rural areas, if the market value of the property exceeds Rs 40 lakh.
Mumbai & Pune
The stamp duty in Mumbai and Pune is charged at the rate of six per cent of the property value. However, these charges may go up if you are buying a property in Mumbai’s premium areas or if the property involves premium amenities. In such cases, you have to pay 50 per cent additional stamp duty charges.
The Noida Authority recently hiked the stamp duty charges from five per cent to seven per cent, a move that drew flak from home buyers as well as developers. This was even as Union Urban Development Minister M Venkaiah Naidu recently asked states to bring down stamp duty charges to make housing more affordable. “The stamp duty was originally collected to maintain the registers. Now, it has become a source of revenue. Charging this on affordable housing people will be a burden,” the minister was quoted as saying by the media.
Why you need to know about stamp duty
The Reserve Bank of India (RBI) last year directed banks to factor in various charges in property transaction for home loan computation. But so far expenditures like stamp duty and registration fee have to be borne by home buyers on their own, even if they are buying a property by taking a home loan. Those who venture into home-buying pursuits without a proper knowledge of the expenses are usually in for a rude shock. In fact, many of them have to put their home-buying plans on hold, for they find it difficult to arrange a substantial amount of hard cash to be paid for the paperwork.
Despite the fact that banks are now including stamp duty, registration and other such charges for deciding the value of a property, the fact remains that the cost of it all has to be eventually borne by home buyers. This makes it imperative for home buyers to be aware of the stamp duty and registration charges.
What are registration charges?
Registration charges are a one-time fee that you pay for registering the property transaction in the government records. These are kept typically at one per cent of the transaction value, even as stamp duty charges varies from city to city, from an urban area to a rural area and from a male buyer to a female buyer.
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