Stamp duty is one of the vital ingredients of any property transaction prevalent in India. It is a state tax on write-offs and property dealings in the state legal systems. However, you have to know something known as the stamp duty value of a property. Most importantly, it will help home buyers. It will also help those planning to invest in real estate and anyone in the real estate field.
This blog will focus on and explain the details of stamp duty and its computations. We will also compare the costs of registering properties by state.
What is Stamp Duty?
Stamp duty is a tax on written and legal documents and property. It is a fee that everyone must pay to the state. This is required for a document to be lawful. The stamp duty is usually a proportion of the property’s worth or consideration.
Who has to pay Stamp Duty and Registration Charge?
As a rule, the purchase price is adjusted this way. Usually, the buyer pays stamp duty and registration charges. But, in some transactions, like property exchanges, the stamp duty and registration charges might be split. The separation is done along the lines of the buyer and the seller.
State-wise Difference in Property Registration Charges
The stamp duty rates and registration charges can vary significantly across different states in India. This is because state governments levy the stamp duty. They set the rates based on factors like the property’s location, type, and value.
Here’s a table outlining the stamp duty rates in some of the major cities in India:
| State | Stamp Duty Rate | Registration Charges |
| Maharashtra | 6% of the property value (5% for women) | 1% of the property value |
| Gujarat | 4% of the property value | 1% of the property value |
| Karnataka | 5% of the property value | 1% of the property value |
| Tamil Nadu | 7% of the property value | 1% of the property value |
| Telangana | 6% of the property value | 1% of the property value |
| Delhi | 6% of the property value | 1% of the property value |
| Uttar Pradesh | 5% of the property value | 1% of the property value |
| West Bengal | 6% of the property value | 1% of the property value |
Stamp Duty Calculation
The stamp duty is calculated based on the property’s market value or the transaction amount, whichever is higher. While calculating you can use the stamp duty formula or online stamp duty cost calculator to
Stamp Duty Calculation Formula:
Stamp Duty = Property Value x Stamp Duty Rate (%)
For example, if the property value is ₹50 lakhs and the stamp duty rate in the state is 6%, then,
Stamp Duty = ₹50 lakhs x 6% = ₹3 lakhs
Factors Considered for Stamp Duty Calculation
Several factors are taken into consideration when calculating the stamp duty for a property transaction. These include:
| Factor | Description |
| Property Location | It covers the area within the Municipal limits, Municipal council/panchayat region, and Gram panchayat region, and stamp duty charges vary depending on the location of the property. |
| Property Type | The type of property used, for instance, residential, commercial, or industrial is also important in determining the stamp duty rate. |
| Property Value | The overall stamp duty charge is based on the market value of the property. |
| Gender of the Buyer | It shall also be important to note that stamp duty can vary with the gender of the buyer across states with the female buyer paying a lesser amount than the male buyer. |
| Purpose of the Transaction | It can also rely on the nature of the transaction where the stamp duty is paid, this may include a sale, lease, or mortgage among others. |
Stamp duty rates in top cities in 2024:
| City | Stamp Duty Rate |
| Mumbai | 6% of the property value |
| Pune | 5% of the property value |
| Hyderabad | 6% of the property value |
| Chennai | 7% of the property value |
| Bangalore | 5% of the property value |
| Delhi | 6% of the property value |
| Ahmedabad | 4% of the property value |
| Kolkata | 6% of the property value |
Documentation Required for Payment of Stamp Duty
To pay the stamp duty, you will typically need to provide the following documents:
- Property sale deed or agreement
- Ownership documents (such as title deeds or property cards)
- Identification documents (such as an Aadhaar card, PAN card, or passport)
- Proof of address
- Photographs (as required)
How is Stamp Duty Paid?
It can be done through various methods, including:
Non-Judicial Stamp Paper Method
In this way, you pay the stamp duty by buying non-judicial stamp papers. You buy them from authorized vendors or government offices. The stamp papers are then affixed to the legal documents.
Franking Method
In the franking method, the sender pays stamp duty to the government. The documents are then “franked” or stamped to show the payment.
E-Stamping
E-stamping is a digital way to pay stamp duty. The payment is made online. An electronic stamp is generated and put on the documents. This method is becoming widely popular through its convenience and security.
Conclusion
Stamp duty is important for property transactions in India you can pay it through online. Understanding its math is essential. This is true for home buyers, real estate investors, and professionals. They must also understand the state-specific variations. Learn the stamp duty rules. Then, use the right payment methods. This will make property transactions smooth and legal.
FAQs
The stamp duty value is the higher of the property’s market value or the transaction value. It is used to calculate the TDS (Tax Deducted at Source) on the property transaction.
If the sale value is higher than the stamp duty value, the duty is based on the sale value. The buyer must pay the higher amount.
In a property transaction, the buyer is responsible for deducting and paying the TDS to the government.