Are you a first-time homebuyer and planning to apply for a home loan? Did you consider the additional cost that your property would incur? If not, read on! Stamp duty is one of the additional costs you are liable to pay on buying or transferring any property. With stamp duty, you also incur registration and other charges that may imbalance your budget and ultimately lead to chaos, burning a hole in your pocket by paying a substantial amount unprepared.
What exactly is Stamp Duty?
Stamp duty is a mandatory indirect tax under the provision of the Bombay Stamp Act, 1958, and the Indian Stamp Act, 1899. It is levied on all real estate transactions before any legal documents are made effective. The burden of paying stamp duty lies with both the seller and the buyer.
What factors are considered during stamp duty registration?
The factors considered during stamp duty registration are age of the property, value of the property, city or location of the property, gender and age of the property owner, and usage of the property.
Is stamp duty applicable on all real estate property transfer documents?
Yes, barring the transfer by will, the stamp duty is mandatory and payable for all transfer instruments, including mortgage deed, conveyance deed, exchange deed, gift deed, lease deed, tenancy agreement, power of attorney, and agreement to sell.
How much do stamp duties cost in India?
In India, the stamp duty varies from state-to-state depending upon the state where you are planning to buy a property.
What types of documentation are needed to pay stamp duty?
The documents required for stamp duty include the PAN Card, Aadhaar Card, or any other available government-issued identity proof. However, the signatories must produce the power of attorney documents if they are in charge on behalf of another person.
How is the calculation for stamp duty done?
The calculation for the stamp duty is based on property valuation, calculated using the guidance value method. The guidance value method or circle rate is the minimum value at which the property registration takes place.
What is the procedure for paying stamp duty?
Stamp duty can be paid in three ways, namely, non-judicial stamp papers, e-stamping, and franking. Singing non-judicial stamp paper is a conventional way where an individual purchases the stamp paper from an approved vendor, writes out all the conditions of the agreement and gets it signed by both parties.