Stamp duty is an essential part of house purchase. Homebuyers have to go through a certain legal process to buy a property in their name. Moreover, it has impeccable legal value and any sale is considered valid only after the stamp duty and registration fee process is completed. Hence, if you are planning for buying a property then you must gather knowledge about stamp duty.
What is Stamp Duty? Why do we pay stamp duty charges?
Stamp duty is the tax that the government place on different legal documents. Especially, these charges are mostly used in transferring assets or property. These charges are also known as stamp taxes that are needed to legally record certain types of transactions.
Indian Government has imposed stamp duties on various legal documents, including sale or transfer of property, real estate, patents, securities, and copyrights. It was first introduced in 1899 by Indian Stamp Duty Act Under Section 3.
Under this section, if you fail to pay this charge, you have to pay a penalty of two percent of the outstanding amount per month. This penalty can go as high as 200 percent of the original liability.
How do calculate the stamp duty charges?
Stamp duty rates are decided by the state government and it differs across the country. In India, stamp duty charges vary from 3% to 10% of the property value. The most important factors that affect stamp duty rates are the location of the property, age of the owner, gender of the owner, types of the property, and project amenities.
What is the Stamp Duty Calculator?
There are several online stamp duty calculators available on the web with an updated version and the calculator will help you to find the amount of stamp duty on your property in your respective state.
How the stamp duty is calculated when buying a house in Delhi?
Stamp Duty is charged on the ready reckoner/ market value/circle rate or the consideration value of the property, whichever is higher for example: –
Cost of your property = Rs. 10,00,000
Registration Charge = 1% of Rs. 10,00,000= Rs.1000
Stamp duty = 6% of Rs. 10,00,000=Rs. 6000
Stamp duty rate in Delhi 2021-2022
Stamp duty charges in Delhi for property buying based on a different kind of property. Similarly, the charges are levied on any property whether the property is acquired through a gift or conveyance or sale deed.
If you are planning to purchase property in Delhi then you can consider DLF Capital Greens, the ready-to-move property where it is charging 6% for the male home buyer and 4% for the female home buyer. In case, if you are buying property jointly then you have to pay 5%.
What are the advantages of paying stamp duty charges?
It acts as home loan tax benefits. To provide relief to taxpayers the Government of India has allowed for tax exemptions under Section 80C of the Income Tax Act. A home buyer can claim these exemptions while filing income tax returns and can enjoy a tax rebate of a maximum amount of up to Rs. 1.5 lacs.
Stamp duty tax has to pay during the transaction of any property. Homebuyers can pay stamp duty online as well as offline.
Is stamp duty reduced in Delhi?
Yes, with the reduction in circle rate in Delhi by 20%, the stamp duty in Delhi will also witness a reduction.
List of Documents required for stamp duty and registration charges
If you are a home buyer, you have to produce some essential documents at the time of registration of property while paying stamp duty.
- Sale deed
- Sale agreement
- Khata Certificate
- If you are living in a society, you have to provide a photocopy of the society share certificate, society registration certificate, and NOC certificate from the society
- In the case of under-construction property, you have to produce a sanctioned building plan, builder-buyer agreement, and possession letter from the builder
- In case of buying residential plots, the buyer should have to provide title documents of the landowner, records of right and tenancy corps, or a 7/12 extract and conversion order
- Latest bank statements
- EC Certificate (Encumber Certificate)