Understanding Stamp Duty Rates and Registration Charges on Property

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Understanding Stamp Duty Rates and Registration
Charges on Property December 1,2017 Real
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The government charges a tax when there is any
transaction of property, i.e., when the property
changes the hands, from a seller to a buyer. This
tax is known as the stamp duty. It is the charge
on commercial and residential property
transactions and leasehold or freehold
properties. The stamp duty is charged by the
states and thus, the rate certainly varies from
state to state. How to calculate the stamp duty
amount The stamp duty ranges from 3 to 10 which
depends on the slab decided by the particular
state. The responsibility of paying stamp duty
generally vests in the property buyer. Stamp duty
is calculated on the higher value in between the
ready reckoner rate or the circle rate as well as
the agreement value of the property. For
instance, the agreement of the property value is
Rs 50 lakhs as well as the value as per the ready
reckoner rate is Rs 40 lakh with the stamp duty
would be calculated on higher value, i.e., Rs 50
lakhs. The stamp duty percentage certainly
depends on various factors, like Status of
property- no matter whether it is new or old
Location of property- city area, metropolitan
area, rural area suburban, etc. Age of
owner- discount available for senior citizens, in
some of the states Gender of the owner- some
states offer concessions for female realty
owners Usage of property- whether it is for
residential or commercial use Type of
property- independent house, flat, etc. How id
stamp duty paid? There are 3 ways to pay stamp
duty through non-judicial stamp paper by franking
the
2
method or making use of the e-stamping method.
Under non-judicial stamp paper method, the
agreement details mentioned in much of the paper
as well as signed by executants. Thus, within 4
months, it needs to be registered at
sub-registrars office. Also, under the franking
method, agreement printed on the plain paper. The
paper is submitted to the authorized bank which
processes the documents with the franking
machine. In the states, one can also pay the
requisite stamp duty amount online, through
NEFT/RTGS. Thus, the stamp duty certificate with
the details like stamp duty type, the date, etc.
can certainly be downloaded for the registration
process. What really happens if you can pay the
inadequate stamp duty? In some of the cases for
the stamp duty, people show an undervalued price
of property in the agreement. Government suffers
the loss of revenue due to the tax evasion. If
you can pay inadequate stamp duty, then, one can
be penalized heavily for evasion. The punishment,
as well as the penalty for the stamp duty
evasion, may actually vary from state to state.
The penalty can range from the 8 to 20 of
actual stamp duty with least penalty limits as
well as imprisonment for certain periods as the
rules of the state. How to save on the stamp duty
charges? Some of the states give significant
discounts on stamp duty for the female real
estate buyers. Thus, if you are looking to save
on the stamp duty, you can buy the property in
name of the female family member. If you have
shortlisted various locations for the purchase of
property, you can compare on the stamp duty
charges in several locations to decide the
location proffering the lowest stamp duty
value. Also, the realty fraternity has been
demanding on the affordable housing be actually
be exempted from the stamp duty charges. If this
happens, the buyers in the segment can provide a
substantial amount. At times, the developers
agree to bear the stamp duty cost and
registration charges. You, however, require being
pretty careful that you dont get charged for it
in the direct ways.
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