Guide to Stamp Duty & Registration Charges In India

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22 AUGUST, 2019

When you are getting a home loan to buy a new house, you have to pay for additional charges, namely, stamp duty and registration charges. Home loan amount sanctioned by bank is generally excluding stamp duty and registration charges. You need to pay these charges additionally in order to obtain the ownership of your new house.

All About Stamp Duty

What Is Stamp Duty?

Stamp duty is a charge levied on any kind of transaction that takes place and is documented. These may include a conveyance deed, sale deed, power of attorney etc. Stamp duty validates the registration of the property in your name. It also legalises the ownership document on your name.

Why Must You Pay The Stamp Duty?

The government maintains all property purchase transactions in India. Once you pay the stamp duty, your name is recorded by the government. The stamp duty acts like proof that property is legally registered under your name. Therefore, if any dispute occurs in the future, your house sale agreement serves as a legal evidence after paying the stamp duty.
If individual declines to pay the stamp duty, he/she is not considered as legalised owner of that particular house.

How Is Stamp Duty Calculated In India?

Stamp duty is based on the value of the property. Stamp duty is not levied on the people involved in the transaction, but on the agreement. It is also dependent on the kind of property i.e. residential or commercial. Stamp duty authorities of respective states refer to the Stamp Duty Ready Reckoner to assess the market value of houses. The government issues the market values on 1st January of every year.

What Are The Factors That Influence Stamp Duty?

Stamp duty varies from state to state. The following factors influence the amount of stamp duty.

Residential or commercial units
Type of land, i.e., agricultural or non-agricultural
Old or new house
Gender of the property owner
Multi-storied apartments or independent houses
Leasehold or freehold

How can you pay stamp duty?

Following are the three ways to pay stamp duty,

Non-judicial Stamp Papers:

Here, the details regarding the document are printed or written on non-judicial stamp paper. You can purchase these papers from licensed vendors. The authorities sign the documents after ensuring their correctness. The value of stamp papers will be equal to stamp duty applicable.

Franking:

In this method, the paper printed with the details of the agreement is submitted to the bank along with the stamp duty amount. Only, some specific banks hold the authority to carry out the franking transactions. Sometimes, the bank may ask you to pay service charges.

E-Stamping:

This is a digital method to pay stamp duty by simply logging on to the official website of SHCIL (Stock Holding Corporation of India Limited) named shcilestamp.com. On the website, you can use various payment methods like NEFT/RTGS or cash/cheque/DD deposit at any of the SHCIL branch offices.

All About Registration

What Is The Registration Fee?

Once you pay the stamp duty, the ownership document needs to be registered under the Registration Act, 1908. The registration should be done within four months from the date of execution.
The charges required to register the property on your name are called registration charges, which are over and above the stamp duty. Every Indian state charges registration as per their own guidelines, thus they vary from state to state. Either 1% of the market value or agreement value, whichever is the higher amount between them is charged as registration fees but subject to a maximum amount of Rs.30,000

How Can You Register Your Property?

You need to print the original document on a side and submit them along with two photocopies of it to the registration office. You, as a buyer along with the seller of the property and with two witnesses, should be present during the process of registration. You will also need to take your ID proofs and proof of stamp copy, if already paid. You will receive the receipt-bearing unique serial numbers after completion of the registration process.

Additional Read: What is a Stamp Duty Calculator & How to use it - Learn Now!